OPEC+ under pressure to increase output following Russia’s invasion of Ukraine

OPEC’s raison d’être, as they continuously remind us, is market stabilization. If they really believe that what’s currently happening in Ukraine and Russia is threatening market stability and will cause a great burden on the global economy, which in turn would potentially result in subsequent oil demand destruction, they might go the extra mile and put additional barrels on top of what they committed to put in the market of 400,000 barrels a day – even though they have not been putting even that in.

It all depends on how the situation will unfold, and, also, on OPEC’s perception of the market. If the group strongly believes that the market is under threat, Saudi Arabia and, particularly, some producing countries of the Gulf Cooperation Council (GCC) which have significant spare capacity, would not hesitate in putting extra barrels into the market for the sake of market stability as they did in the past. 

Taking into account the widespread international condemnation and announcements of tougher sanctions on Moscow from the US, the UK, and EU, Dr Nakhle warned of the uncertainties in Russia’s response to these sanctions.