Oil prices hit a seven-year high above $90 a barrel last month, sparking expectations of a triple-digit comeback.
OPEC countries barely increased output last month amid chronic struggles among members and fresh unrest in Libya, again illustrating the group’s inability to calm a booming market.
The Organization of the Petroleum Exporting Countries and its partners are expected to approve the resumption of more interrupted supplies when they meet online on Wednesday. But a Bloomberg survey showed they ran into serious trouble in December, partly due to falling investment.
Oil prices hit a seven-year high above $90 a barrel last month, raising expectations of a triple-digit comeback as supplies from OPEC+ and elsewhere failed follow the strong recovery in demand after the pandemic. The rally stokes the wave of inflation that frustrates central banks and inflicts a cost of living crisis on millions.
The 13 OPEC members raised output by just 50,000 barrels per day in December, as slight gains across the group were wiped out by a 140,000 barrel per day decline in Libya, according to the investigation. They pumped 28.14 million barrels per day in total. The North African nation has been hit with a blockade of its western fields by militias, forcing the closure of its largest reservoir, Sharara.
The 10 OPEC countries participating in an agreement with non-members such as Russia have increased by 160,000 barrels per day, or about two-thirds of the targeted amount.
The full coalition of 23 OPEC+ countries is expected to give the go-ahead to return 400,000 barrels per day for March, although that too is plagued with technical difficulties. Its compliance with budget cuts was 122% in December, according to data presented to an internal committee on Tuesday.
Widespread difficulties in restoring supplies are weighing increasingly heavily on the Gulf countries of the group: Saudi Arabia, United Arab Emirates, Iraq and Kuwait. But that in turn leaves traders worried about how much spare capacity they have to cover any disruption, whether it’s deeper losses in Libya or another attack like last month’s drone attack in Abu Dhabi.
The figures are based on vessel tracking data, information from officials and estimates from consultants including Rystad Energy AS and JBC Energy GmbH.