OPEC+ seen sticking to policy, ditches IEA data

Zibago · Mar 31, 2022

OPEC+ seen sticking to policy, ditches IEA data

Reuters 31 Mar, 2022

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OPEC and allies including Russia are expected to stick with plans for a modest May oil output increase on Thursday, sources said, as the group removed the International Energy Agency from its trusted data sources in another sign of a widening standoff with the West.
OPEC+ is scheduled to hold a full ministerial meeting at 1130 GMT and is seen sticking to an existing deal to increase its May output target by about 432,000 barrels per day.
OPEC+ includes the Organization of Petroleum Exporting Countries (OPEC) members and others including Russia.
The group has resisted repeated calls by the United States and the IEA to pump more crude to cool prices which rallied to near an all-time high on concerns about Russian supply disruptions after Washington and Brussels imposed sanctions on Moscow for its invasion of Ukraine.
“Saudi Arabia will be keen to avoid falling out with Russia by adding extra barrels at a time when Russian production is struggling,” said Callum Macpherson at Investec.
Saudi Arabia and the United Arab Emirates, which hold the bulk of spare production capacity within OPEC, have resisted calls for higher output, saying the group should stay out of politics and focus on balancing oil markets.
The administration of US President Joe Biden is weighing the release of up to 180 million barrels of oil from the Strategic Petroleum Reserve (SPR) and the IEA is set to meet on Friday to decide on a collective oil release.
OPEC flags risk to oil demand outlook
Brent crude futures were down 4% towards $109 per barrel in early trading on Thursday.
Ditching the iea
The Joint Technical Committee which advises OPEC+ decided on Wednesday to stop using IEA data, replacing it with reports from Wood Mackenzie and Rystad Energy, a source told Reuters.
The Paris-based IEA advises Western governments on energy policy and has the United States as its top financier.
The IEA did not immediately respond to a Reuters request for comment.
Some OPEC+ members have been critical of IEA data, saying it was erroneous on several occasions and noted the IEA had advised against further investment in the hydrocarbons sector, failing to foresee growing demand.
“The IEA has compromised their technical analysis to fit their narrative,” the source told Reuters. “This is evident when observing the frequent changes in their recent reports and how far they deviate from other respected agencies,” he said.
The IEA in February revised its baseline estimate of global demand by nearly 800,000 barrels per day, just under 1% of the 100 million bpd global oil market.
UAE energy minister Suhail al-Mazrouei told an industry conference this week that institutions like the IEA needed to be “more realistic” and not issue information that was “misleading”.
The JTC uses the data to assess crude oil production and the conformity of participating countries with agreed output curbs.