OPEC tells IMF that oil price rally mainly due to geopolitics
By Alex Lawler
LONDON (Reuters) – OPEC advised the Worldwide Financial Fund’s steering committee on Thursday that the surge in oil costs was largely because of the Ukraine disaster, within the newest sign that the producer group wouldn’t take additional motion so as to add provide.
In an announcement to the Worldwide Financial and Monetary Committee (IMFC) seen by Reuters, OPEC mentioned the value of world benchmark Brent crude had averaged close to $98 a barrel within the first quarter, up about $18 from the final three months of 2021.
“Oil costs have been on the rise, notably in March this yr … primarily because of the escalating geopolitical tensions in Japanese Europe and issues this would possibly lead to massive oil provide shortages, amid commerce dislocations,” OPEC advised the IMFC.
The IMFC is a part of the spring conferences of the Worldwide Financial Fund (IMF) and the World Financial institution’s Board of Governors.
OPEC, which took half in a gathering of the IMFC final yr, has been resisting calls by america and European Union to pump extra oil to chill costs, which reached a 14-year peak above $139 final month after Washington and Brussels imposed sanctions on Moscow over its invasion of Ukraine.
OPEC+, which consists of OPEC and different producers together with Russia, will elevate output by about 432,000 barrels per day in Might, as a part of a gradual unwinding of output cuts made throughout the worst of the COVID-19 pandemic.
OPEC mentioned that OPEC+ had proven its dedication to making sure that oil provide and demand fundamentals have been in stability throughout the Ukraine disaster to help the worldwide economic system.
OPEC additionally highlighted the unfavorable short-term influence of the Ukraine disaster and ongoing pandemic, including: “The sturdy rise in commodity costs, together with ongoing provide chain bottlenecks and COVID-19-related logistical constraints are fuelling already excessive world inflation”.
(Reporting by Alex Lawler, Enhancing by Alexander Smith)
