No surprises from OPEC+

As agreed in the summer, OPEC+ had been gradually increasing its production capacity with increases of 400 thousand barrels per month for a while. Although the expectation of the market before the meeting is to take an increased decision at this level, investors state that it will be closely monitored whether the production capacity of the union can keep up with the decisions taken.

The targeted figures in January could not be reached

In the decision taken last month, the Union had difficulties in realizing the production increase of 400 thousand barrels. Although OPEC+ could not fully implement the production increase decision it took last month, it has made another production increase decision for March, adhering to the monthly increase strategy it had previously determined. After the short meeting held on Wednesday, representatives of some countries, who did not want to reveal their names, stated that an increase of 400 thousand barrels per day for March has been decided. While OPEC+ reiterated the commitments it made in previous months, polls showed that the group struggled to meet its January commitments due to a lack of investment and actions by militia groups.

Falling production in Russia and Libya is pushing spare capacity

The burden of the increase in production, which is becoming more and more widespread, has been placed on the shoulders of the Gulf countries, which are generally Saudi Arabia, the UAE, Iraq, and Kuwait. This raises concerns among investors as to the militant turmoil in Libya or the significant strain on spare capacity reserved for use in times of crisis like those in Abu Dhabi. According to the survey by Bloomberg, OPEC, which lost 140,000 barrels per day due to the crisis in Libya, was able to increase only 50 thousand barrels after closing this loss with the increase of 13 member countries in total. The militants, who took action in the Western Region of the South African country, caused the closure of the Sharara plant, the largest production site. Another country that brought down the production figures was Russia. Russia pumped 46.53 million tons of oil in January, according to data from the CDU-TEK department of the Ministry of Energy. When this figure is converted into the units of measurement used by the sector, a figure of 10.05 million barrels, or 50 thousand barrels per day below the committed quota, is reached. On the other hand, 10 OPEC+ member countries managed to achieve an increase of 160,000 barrels, two-thirds of their target. Among these countries, Nigeria stood out as a shining star. The country managed to increase its daily production by 100,000 barrels after the Forcados transportation system returned to its normal operating level. Oil prices, which reached their highest level in seven years by exceeding $90 last month, caused expectations to rise above $100 due to increasing demand and the inability to reach the production figures targeted by OPEC+. Oil prices, which have been on the rise for the last few months, cause a wave of inflation and a cost of living that worries central banks all over the world.