OPEC in the Dark on Supply Outlook

OPEC is in the dark on the oil supply outlook for the second half of this year, with Iranian and Russian outages looking increasingly significant but Saudi Arabia reluctant to pump more due to fears of a price crash, sources in the organization said.
An oil contamination forced Russia to halt flows along the Druzhba pipeline, a key conduit for crude into Eastern Europe and Germany, in April. The suspension left refiners scrambling to find supplies and its duration is unclear, Reuters reported.
Iran’s oil exports are likely to drop further in May as the United States tightens the screw on Tehran’s main source of income. Shipments from Venezuela, also under US sanctions, could fall more in coming weeks.
The dearth of information is a headache for OPEC and allies led by Russia, which gather in June to decide whether to renew a supply-cutting deal. A panel of ministers meets on May 19 in Saudi Arabia to discuss the market and make recommendations.
Two delegates from the Organization of the Petroleum Exporting Countries said the Russian outage, on top of Iranian and Venezuelan export losses, would be discussed at the Jeddah meeting and it seemed more than a short-term technical glitch.
“It’s potentially significant,” one of the delegates said of the pipeline halt. Still, the delegate added, the price of Brent crude - close to $70 a barrel, down from a 2019 high of $75.60 last month - suggested traders saw no major risk of any shortage.
Other OPEC sources said there were conflicting views on the significance of the Russian outage, and that the complexity of Russia’s pipeline system meant the issue was not straightforward.