Officials from OPEC countries and their allies will meet Wednesday by teleconference to consider whether to add more oil to an increasingly tight market.
Oil prices are hovering at seven-year highs, near $90 a barrel, adding to inflation and raising living costs for consumers around the world, including in the United States.
Normally, those conditions could prompt expectations that the group, known as OPEC Plus, would seek a substantial increase in output.
Most analysts, though, are skeptical that the oil ministers will do more than proceed with a plan, agreed in July, to increase production next month by a relatively modest 400,000 barrels a day.
With uncertainty building over the confrontation with Russia over Ukraine, the group will most likely “sit back and wait as events unfold,” analysts from Citigroup wrote in a recent note to clients.
But OPEC Plus has consistently fallen short of its targets in recent months, and so analysts say that the result will more likely be an addition of around 250,000 barrels a day.
If so, markets may well heat up further, especially if conflict over Ukraine threatens to disrupt energy flows. Any disruption involving Russia, a major oil exporter, would send shudders through the markets.
OPEC Plus is in a tricky position over Ukraine. For months the Biden administration has been lobbying members of the group, including Saudi Arabia and the United Arab Emirates, to increase output to help ease the pain from high oil and gasoline prices. It will most likely press harder for increases to make up any shortfalls resulting from the Ukraine situation.
Yet such actions might be complicated by Moscow’s position as an influential member of OPEC Plus, which was formed in 2016. Russia’s deputy prime minister, Alexander Novak, is co-chairman of the group and might argue against raising output to aid Washington’s goals.
Saudi Arabia, still the key decision maker in OPEC, has been cautious on increases but might change its calculations if “conventional war breaks out on European soil and crude prices soar past the $100 a barrel mark,” wrote Helima Croft, an analyst at RBC Capital Markets, an investment bank.
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