HOUSTON — Even with boycotts upending supplies from Russia, major oil-producing countries are likely to hold the line on output for now, keeping prices high and reaping the benefits. But that course could prove detrimental in the long run.
That is the view of Oil Minister Ihsan Abdul Jabbar of Iraq, a member of the Organization of the Petroleum Exporting Countries. He says OPEC Plus — a group of 23 nations including Russia, the world’s No. 3 producer — will stick to plans to increase output by a modest 400,000 barrels a day next month.
But in an interview Wednesday, he said Iraq and other Middle Eastern producers were concerned that high prices could lower demand or even hasten the transition to electric vehicles, reducing reliance on oil.
“We are happy in the short term, but not happy if this lasts,” said Mr. Abdul Jabbar, who was in Houston to attend CERAWeek, an energy conference.
Even OPEC’s current course could change by May if oil prices keep rising because of Russia’s invasion of Ukraine, he said. “OPEC will stay with the program,” he said. “If there are real sanctions on Russian oil, OPEC will make the right decision — if there are real shortages.”
He said that neither American officials nor anyone else could force OPEC’s hand, however, and that its decisions would be based on the advice of its analysts. “No one can persuade,” he said. “OPEC listens to research reports.”
Mr. Abdul-Jabbar said there had been little energy investment in the Persian Gulf region over the last two years because of the coronavirus pandemic and low global demand and that it would take time to increase production significantly. He estimated that Iraq, one of the world’s most important producers, could manage an increase of only 40,000 barrels a day, a drop in a global market that consumes 100 million barrels a day.