In this list

OPEC+ on tap to hike oil output despite Indian COVID-19 crisis weighing on market

Crude Oil

Platts Crude Oil Marketwire

Energy Transition | Metals

US government stepping into battery metals where private capital is hesitant

Oil | Energy Transition | Energy

APPEC 2024

Shipping | Agriculture | Grains | Rice | Oilseeds | Biofuels

INTERVIEW: Alphamar director sees 17 million mt of Brazilian corn going for ethanol

Energy | Oil | Crude Oil

FOB Straits Price Assessment

Energy Transition | Carbon | Emissions | Hydrogen | Renewables

EC announces Eur1.2 billion for second hydrogen bank auction

For full access to real-time updates, breaking news, analysis, pricing and data visualization subscribe today.

Subscribe Now

OPEC+ on tap to hike oil output despite Indian COVID-19 crisis weighing on market


OPEC+ ministers scheduled to convene April 28

Alliance set to ease cuts by almost 800,000 b/d in May

Delegates monitoring India's surge in COVID-19 cases

  • Author
  • Herman Wang
  • Editor
  • Robert Perkins
  • Commodity
  • Oil
  • Topic
  • Coronavirus And Commodities OPEC+ Oil Output Cuts

OPEC and its allies appear set to press on with raising crude production despite the coronavirus crisis enveloping key oil consumer India, delegates told S&P Global Platts, though they'll have another couple of days to pore over market data and forecasts.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

An advisory technical committee April 26 took note of India's surge of COVID-19 cases but delegates said the impact on oil demand was not yet clear.

OPEC+ ministers are scheduled to convene online April 28 to make a final decision on earlier-agreed plans to hike output by 600,000 b/d in May, en route to a total production rise of 2 million b/d by July.

"We remain vigilant on the situation of India but [made] no recommendation to delay the increase in production," said one delegate who participated in the technical committee meeting, adding the coalition likely will meet again toward the end of May to continue reviewing its plans. "If the situation worsens, OPEC+ can make a decision at its next meeting."

The 23-country OPEC+ alliance has enacted severe output cuts over the past year to pull the oil market out of its coronavirus crash, with the intention of gradually paring cuts back as the global economy recovers.

For April, the bloc's quotas call for cuts totaling 6.9 million b/d, though OPEC kingpin Saudi Arabia has also voluntarily held its production 1 million b/d below its cap to juice the market rebalancing efforts.

Starting in May, the quotas will rise by 350,000 b/d, while Saudi Arabia has said it will ease its extra cut by 250,000 b/d, for a total OPEC+ production increase of 600,000 b/d.

That decision is underpinned by rosier demand expectations and a robust rally in oil prices over the past few months, though Dated Brent has steadied in the mid-$60s/b in recent days.

In its most recent oil market report April 13, OPEC's analysts forecast global oil demand would grow 5.95 million b/d this year, up from the 5.89 million b/d projected in March.

Delegates also cited the backwardation in Brent prices, the significant drawdown of oil inventories and the rapid rollout of vaccines in the US, UK and other countries.

"There are positive signals regarding the global economy and prospects for our industry," OPEC Secretary General Mohammed Barkindo told the technical committee, according to a news release.

But the emerging crisis in India, with world-record COVID-19 cases and strict lockdown measures imposed in some regions, threatens to derail the market's recovery.

India is the third-largest consumer of oil and a critical customer of many OPEC+ members, and analysts say the country's refineries may soon be forced to slash crude runs as domestic demand slumps.


A ministerial monitoring committee, co-chaired by Saudi Arabia and Russia, will gather online at 1:30 pm Vienna time (1130 GMT) April 28 to review market conditions and assess member compliance with quotas.

The full OPEC+ conference is scheduled to kick off after the committee concludes its business, though delegates said there remains a possibility the meeting could be canceled if ministers agree beforehand that no changes to their production increase plans are needed.

As with most OPEC+ meetings, Saudi Arabia's read of the market will be a primary focus, especially with its voluntary cut.

If crude prices fall in the lead-up to the meeting, "I would expect Saudi Arabia to be particularly cautious when it comes to production hikes," said Yousef Alshammari, CEO of the London-based oil consultancy CMarkits. "This means we may also see [OPEC+] hiking production as planned, while Saudi Arabia still keeps its voluntary cuts to save prices from any potential collapse."

Saudi energy minister Prince Abdulaziz bin Salman also has a penchant for market surprises at OPEC+ meetings, for instance, wrong-footing traders by announcing the unilateral Saudi extra cut in January and then prevailing on OPEC+ counterparts to keep quotas largely unchanged through April.

However, Libya's volatile oil sector could offset the market impact of India's coronavirus emergency. Budget disputes with Libya's central government had caused operators to halt production at several fields, pushing output down under 1 million b/d over the past week, from about 1.2 million b/d. Some production may return in the coming days, however, with the resolution of some issues and Libya's National Oil Corp. lifting force majeure on exports out of the eastern Marsa el-Hariga terminal.

Talks between the US and Iran on sanctions relief that could lead to up to 2 million b/d of Iranian crude returning to the market will also bear watching, though no breakthrough appears imminent. Those negotiations are slated to resume in Vienna on April 27, according to the EU.