OPEC is sticking to its policy of increasing supply by just 400 kbpd each month despite record high oil prices and geopolitical tensions worldwide. The vote to increase March supply slightly does not come as a surprise, since OPEC+ has not deviated from its slow and steady approach to restoring output despite heavy pressure from world powers, including the US.
This group of oil giants, while seemingly slow in progress, is starting to undo some of their record production cuts that saw 10 million barrels per day cut. That was enforced in April of 2020 to help the oil and gas sector recover from the harmful economic effects of the COVID-19 pandemic. But for the most part, COVID-19 seems to be slowing down across the world and people are beginning to populate large areas again for the first time. This is seen especially the in the world of sports, where over 70,000 people will gather for Super Bowl LVI at SoFi Stadium in two weeks’ time.
So even though the world is returning to normal, why isn’t OPEC+ increasing production levels? The answer has been asked numerous times, but OPEC+ leaders remain adamant that boosting levels too quickly would create significant changes for demand. Another problem stems from some of the members of the cartel not being able to meet the current policy, so any increases to production would certainly not be met for the time being.