Oil-producing nations stick to their plan despite Ukraine

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Even though oil prices are at seven-year highs, a powerful group of oil- producing countries say they will only increase their output by a small amount.

Opec and its allies, led by Russia, will not be cutting production.

400,000 barrels of oil will be added to the market from April.

The group is sticking to an agreement it made with its members in 2021. Many countries produced less oil during the Pandemic.

The global benchmark contract for oil, Brent crude, has surged $113 a barrel due to anxiety over tighter supply.

Opec+ stated that there was no shortage of supplies in the market and that the recent rise in prices was caused by market volatility.

The International Energy Agency has agreed to release 60 million barrels of oil from their strategic reserves.

Half of that volume is expected to come from the United States. Oil prices rose immediately after the decision was announced and stock and commodity markets were not reassured.

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Energy market experts think oil prices will stay high.

Major oil and gas companies, including Shell, have announced plans to exit Russian operations.

Customers of Russian oil are facing difficulty in payments and shipping after the West imposed sanctions, according to reports.

We are looking at a serious run-up in prices. A senior fellow at the Centre for Strategic and International Studies in Washington says that the markets are nervous because of the uncertainty about Russia.

Over the last few days, oil exporters have been offering Russia's highest-quality oil at a discount, but few buyers have shown up.

Russia is the third largest producer of oil behind the United States and Saudi Arabia. It accounts for 10% of the global oil supply. Europe depends on Russia for 40% of its natural gas. The US and European Union have stopped short of imposing sanctions on Russia's oil and gas industries because of Russia's crucial position in the global energy market.

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Analysts say the group's decision to stick to its timetable - a gradual increase in production - has not come as a surprise, given its previous reluctance to deviate from steadily ramping-up output.

Adding more supplies to the market could lead to an oversupply later in the year. Prices would fall sharply if there was aglut.

The experts think that the physical supply on the market has not changed yet. The prices have gone up in response to uncertainty.

Buyers who were reluctant to purchase from Russia are now choosing to purchase Middle Eastern oil.

Opec+ has always based its decisions on what the current data is showing them, rather than what the data will look like in the future due to geopolitical factors, according to an analyst.

Opec+ members may be holding back because of another reason. The Iran nuclear deal is expected to come to a head in March. Iranian oil exports could be unlocked if sanctions are loosened.

The deal could put the brakes on the oil rally, and bring down prices, according to Mr Cahill.

The Iran deal could break the price momentum, he says.

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The US has been putting pressure on key Opec member states, such as Saudi Arabia and the United Arab Emirates, to turn on the taps, but has not succeeded.

Russian President Putin has been in touch. The Opec+ deal was discussed during a call between Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan and the president of the United States.

The response from the Gulf States has so far been quiet.

The United Nations Security Council voted last week on a draft resolution condemning Moscow for its actions. Saudi Arabia and the United Arab Emirates may be taking a more neutral stance towards Russia on energy and geopolitics, according to analysts.