Beautiful Virgin Islands

Tuesday, Oct 07, 2025

OPEC and Russia keep promising to pump more oil. They're not delivering

OPEC and Russia keep promising to pump more oil. They're not delivering

Here's one big reason oil prices are near a seven-year high: OPEC and Russia are producing less than they promised.

The Organization of the Petroleum Exporting Countries and 10 other major crude oil producers, including Russia, have been gradually increasing their output after taking 9.7 million barrels per day out of the market as demand collapsed in the early days of the coronavirus pandemic.

But the group, known as OPEC+, has repeatedly failed to meet its monthly target of adding back 400,000 barrels per day due to production shortfalls in several countries.

Despite huge pressure from major energy consuming nations, including the United States, to help tame high prices that are fueling global inflation, it will be difficult for the coalition to quickly increase output because of limited spare capacity and a fraught geopolitical backdrop.

OPEC+ authorized another 400,000-barrel-per-day increase for March on Wednesday, brushing off calls for the group to pump even more. The modest output jump, even if delivered in full, is unlikely to reduce global oil prices, which have surged to a seven-year high of roughly $90 per barrel following two months of steady gains.

"There are concerns in the market, partly priced in, that OPEC+ will not be able to produce what they say in the future," said Bjørnar Tonhaugen, the head of oil markets at Rystad Energy. "There is anxiety about damage to production capacity from Saudi Arabia to Kuwait and Russia, from too low investments during the pandemic and before."

Missed targets


Production from OPEC+ countries increased by only 250,000 barrels per day in December, or 63% of the group's stated target, according to the International Energy Agency. The IEA attributed most of the shortfall to reduced supply from Nigeria and Russia, which pumped below its monthly quota.

Including the December shortfall, OPEC+ was running 790,000 barrels per day below its overall output target. The core OPEC group undershot its output quota again in January, according to survey data complied by Reuters, meaning the gap could widen further.

Goldman Sachs analysts said Monday that oil prices are "entering political intervention territory." But many OPEC+ countries are pumping at full capacity, and bringing forward production increases could upset the balance of power within the group.

Who could pump more?


Saudi Arabia and the United Arab Emirates are the OPEC+ countries with the most spare pumping capacity, according to the International Energy Agency.

But Saudi Arabia is not inclined to dramatically increase output, if the outcome of Wednesday's meeting is any indication. "We have an OPEC+ agreement, and I have to honor my colleagues and my friends," Saudi oil minister Prince Abdulaziz bin Salman told S&P Global Platts in January at a conference in Dubai.

Processing facilities at the Khurais oil field in Saudi Arabia, on Monday, June 28, 2021.


OPEC+ countries that rely on oil revenue to fund government spending have benefited from the recent price surge. Russia, which has amassed roughly 100,000 troops on Ukraine's borders but denies that it is planning to invade its neighbor, has its own reasons to want higher prices.

"Russia's foreign exchange reserves have swelled on the back of rising commodities prices, as well as key fiscal reforms such as raising the retirement age, potentially giving it more financial bandwidth to endure additional western sanctions," said Helima Croft, the head of global commodity strategy at RBC Capital Markets.

With the risk from the Omicron variant of coronavirus fading, Tonhaugen said markets are looking for OPEC+ to meet global demand.

"While the jury is out on the actual spare capacity of OPEC+, the market is not convinced the capacity actually exists until it is proved, and it falls on OPEC+ and Middle East producers to deliver," he said.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
OpenAI and AMD Forge Landmark AI-Chip Alliance with Equity Option
Munich Airport Reopens After Second Drone Shutdown
France Names New Government Amid Political Crisis
Trump Stands Firm in Shutdown Showdown and Declares War on Drug Cartels — Turning Crisis into Opportunity
Surge of U.S. Billionaires Transforms London’s Peninsula Apartments into Ultra-Luxury Stronghold
Pro Europe and Anti-War Babiš Poised to Return to Power After Czech Parliamentary Vote
Jeff Bezos Calls AI Surge a ‘Good’ Bubble, Urges Focus on Lasting Innovation
Japan’s Ruling Party Chooses Sanae Takaichi, Clearing Path to First Female Prime Minister
Sean ‘Diddy’ Combs Sentenced to Fifty Months in Prison Following Prostitution Conviction
Taylor Swift’s ‘Showgirl’ Launch Extends Billion-Dollar Empire
Trump Administration Launches “TrumpRx” Plan to Enable Direct Drug Sales at Deep Discounts
Trump Announces Intention to Impose 100 Percent Tariff on Foreign-Made Films
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Singapore and Hong Kong Vie to Dominate Asia’s Rising Gold Trade
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Manhattan Sees Surge in Office-to-Housing Conversions, Highest Since 2008
Switzerland and U.S. Issue Joint Assurance Against Currency Manipulation
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Thomas Jacob Sanford Named as Suspect in Deadly Michigan Church Shooting and Arson
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
New York Man Arrested After On-Air Confession to 2017 Parents’ Murders
U.S. Defense Chief Orders Sudden Summit of Hundreds of Generals and Admirals
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
Trump Claims FBI Planted 274 Agents at Capitol Riot, Citing Unverified Reports
India: Internet Suspended in Bareilly Amid Communal Clashes Between Muslims and Hindus
Supreme Court Extends Freeze on Nearly $5 Billion in U.S. Foreign Aid at Trump’s Request
Archaeologists Recover Statues and Temples from 2,000-Year-Old Sunken City off Alexandria
China Deploys 2,000 Workers to Spain to Build Major EV Battery Factory, Raising European Dependence
Speed Takes Over: How Drive-Through Coffee Chains Are Rewriting U.S. Coffee Culture
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Ringo Starr Champions Enduring Beatles Legacy While Debuting Las Vegas Art Show
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
FBI Removes Agents Who Kneeled at 2020 Protest, Citing Breach of Professional Conduct
Trump Alleges ‘Triple Sabotage’ at United Nations After Escalator and Teleprompter Failures
Shock in France: 5 Years in Prison for Former President Nicolas Sarkozy
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
BNP Paribas Abandons Ban on 'Controversial Weapons' Financing Amid Europe’s Defence Push
Typhoon Ragasa Leaves Trail of Destruction Across East Asia Before Making Landfall in China
The Personality Rights Challenge in India’s AI Era
Big Banks Rebuild in Hong Kong as Deal Volume Surges
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Arnault Denounces Proposed Wealth Tax as Threat to French Economy
Study Finds No Safe Level of Alcohol for Dementia Risk
Denmark Investigates Drone Incursion, Does Not Rule Out Russian Involvement
Lilly CEO Warns UK Is ‘Worst Country in Europe’ for Drug Prices, Pulls Back Investment
Nigel Farage Emerges as Central Force in British Politics with Reform UK Surge
Disney Reinstates ‘Jimmy Kimmel Live!’ after Six-Day Suspension over Charlie Kirk Comments
×