OPEC+ faces critical decision on next moves  

Al-Monitor Pro Members

Dr. Karen E. Young 

Senior Research Scholar, Columbia University, Center on Global Energy Policy 

Aug. 1, 2022

As OPEC and a set of additional oil producers meet this Wednesday, Aug. 3, the production agreement set in place in December 2016 between the so-called OPEC+ countries, most important among them Russia, is coming to a decision point. At a moment of extreme uncertainty on both global demand for oil in an expected recession and uncertainty on the ability of Russia to continue exports as European Union sanctions kick in and the cost of insuring seaborne deliveries increases, OPEC+ must decide whether it can hold together for longer and at what production targets. The track record for 2022 has not demonstrated production capacity at even agreed-upon lower targets for most of the OPEC members. Estimating the direction of volatility in oil demand is difficult, as is the estimation of available production that can get to market, with Iran and Russia creating substantial uncertainty.