Brent plunges on OPEC+ output hike

The front-month ICE Brent contract has moved $1.80/bbl lower on the day, to trade at $70.63/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

Diminishing hopes for a Russia-Ukraine peace deal have provided some support to Brent’s price.

Oil market participants worry that a ceasefire deal between Moscow and Kyiv will be further delayed, following last week’s intense public row between US President Donald Trump and Ukrainian counterpart Volodymyr Zelenskyy.

“Uncertainty abounds following last week’s showdown between the US and Ukraine,” two analysts from ING Bank noted.

If achieved, the deal could lead to easing of sanctions on Russian oil exports and increase global oil supply, according to market analysts.

“It’s unclear where the US now stands, making a peace deal seem more distant than a week ago,” ING Bank’s analysts added.

Downward pressure:

Brent crude’s price plummeted after OPEC+ members reaffirmed the group's plan to bring back some supply starting next month.

The eight members of the Vienna-headquartered coalition participating in the 2.2 million b/d of combined voluntary production cut have decided to proceed with a gradual unwinding starting 1 April, it said.

“Consensus in the market was for the group to postpone the restart, something that had already been done three times since the agreement was struck in June 2024,” ANZ Bank’s senior commodity strategist Daniel Hynes said.

This is the first production increase announced by the group since 2022. The plan outlines a gradual phase-out of these cuts from April 2025 to September 2026, OPEC said earlier.

“Given the market was largely expecting another delay [in production hike], oil prices are likely to remain under downward pressure,” Hynes added.

By Aparupa Mazumder

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