OPEC+ chose to maintain crude oil supply cuts for the first half of the year to keep global markets tight and potentially push prices higher.
Saudi Arabia proposed no policy change at an online review meeting on Wednesday. This means that about two million barrels per day will be blocked until the end of June.
Cuts by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) have pushed the price of crude oil to nearly $90.00 a barrel in London and dragged it to its highest level this year.
It is also supported by the ongoing conflict in the Middle East and the growing Russia-Ukraine war.
As a result of the sanctions, OPEC+ is seen as poised to ensure that the global oil market remains in a low deficit in the second quarter. The shortage could cause oil prices to soar to $100 per barrel.
This will cause discomfort among consumers because many feel that the inflation rate is increasing from year to year and this will complicate the task of the central bank in easing its monetary policy.
However, Saudi Arabia and its allies see it as an opportunity to increase government revenue this year.
According to former White House Advisor, Bob McNally said the global crude oil supply market is still on a solid track and that will not be a very serious issue.
Also, some key members such as Kazakhstan and Iran did not implement the reduction. They were urged to abide by the ruling as OPEC members and asked to present a detailed plan on this matter at the April meeting.
