The Saudi-led OPEC oil cartel and allied producers including Russia have stuck to their output targets, despite uncertainty over the impact of fresh Western sanctions against Moscow.
The decision to maintain the status quo at a meeting of oil ministers on Sunday came ahead of the planned start of two measures aimed at hitting Russia‘s oil earnings following its invasion of Ukraine.
These are a boycott by the EU of most Russian oil, and a price cap of $60 (£49) on every barrel of its crude imposed by the G7 coalition of leading world economies.
OPEC+, which is made up of the Organisation of the Petroleum Exporting Countries (OPEC) and allies including Russia, angered the US and other Western nations in October when it agreed to cut output by two million barrels per day, about 2% of world demand, from November until the end of 2023.
The move, which would lead to increased prices at a time of already soaring energy costs, led Washington to accuse the group of siding with Russia despite Moscow’s assault on Ukraine.
OPEC+ argued it had cut output because of a weaker economic outlook.
Oil prices have declined since October due to slower Chinese and global growth and higher interest rates, prompting market speculation the group could cut output again.
However, the group of oil producers has now decided to keep the policy unchanged.
Its key ministers will next meet at the start of February for a monitoring committee, while a full meeting is scheduled for 3-4 June.
The price cap was agreed on Friday by G7 nations and Australia to deprive Russia’s leader Vladimir Putin of revenue while keeping Russian oil flowing to global markets.
Moscow has said it would not sell its oil under the cap and was considering how to respond.
Many analysts and OPEC ministers have said the price cap is confusing and probably ineffective, as Moscow has been selling most of its oil to countries like China and India, which have refused to condemn the war in Ukraine.
The price cap was not discussed at Sunday’s OPEC+ meeting, according to sources.
Russia’s deputy prime minister Alexander Novak said his country would rather cut production than supply oil under the price cap, and pointed out the limit may affect other producers.
Several OPEC+ members are understood to have expressed frustration at the cap, saying the measure could ultimately be used by the West against any producer.
Washington has said the measure was not aimed at OPEC.