Oil prices have strengthened considerably since Opec+ countries agreed on 3 March to extend 2.2mn b/d of voluntary production cuts for another three months. Saudi Arabia and other Opec+ states announced in a series of coordinated statements that the cuts are being extended by three months to the end of June in order to “support the stability and balance of oil markets” (MEES, 8 March).

While the cuts are only slated to extend to end-June, the IEA announced earlier this month that its new base case assumption is that they will ultimately be extended through to the end of 2024 (MEES, 15 March). This IEA announcement, coupled with an upgrade to its demand expectations for the year, has helped firm up prices. Meanwhile, Ukrainian drone attacks on Russian refineries which have now taken as much as 900,000 b/d capacity offline have further pumped up prices, with ICE Brent settling at $87.48/B on 28 March. (CONTINUED - 1076 WORDS)