Moscow / Dubai / London — OPEC + ministers have agreed to raise oil supplies from August to lower prices, which have risen to two and a half years high, as the global economy recovers from the coronavirus pandemic.
Groups, including OPEC countries and allies like Russia, will decisively move to a new production allocation from May 2022 after agreeing to a request from the United Arab Emirates (UAE) that threatened plans by Saudi Arabia and others. I agreed.
“We are pleased with the deal,” UAE Energy Minister Sukhail bin Mohammed al-Masroy said at a news conference. Prince Abdullah Zizbin Salman, Minister of Energy of Saudi Arabia, refused to answer questions about how to reach a compromise.
Last year, OPEC + reduced production by a record 10 million barrels (bpd) per day amid sluggish demand and price plunges due to the pandemic. We gradually recovered supply and achieved a reduction of approximately 5.8 million barrels / day.
OPEC said in a statement that from August to December 2021, the group would increase its supply by another 2 million barrels / day or 400,000 barrels / day.[O/R] We aim to completely phase out cuts by September 2022.
This group is holistic from the previous planning date of April 2022 to the end of 2022 to leave more room for maneuver in case global recovery stagnates due to new viral variants. Agreed to extend the agreement.
While both Riad and the UAE supported an immediate increase in production, the UAE opposed Saudi Arabia’s idea of extending the agreement until December 2022 without obtaining higher production quotas.
To overcome the discrepancy, OPEC + has agreed on new production quotas for several members from May 2022, including the United Arab Emirates, Saudi Arabia, Russia, Kuwait and Iraq.
The United Arab Emirates confirms that baseline production, for which reductions are calculated, will increase from 3.168 million today to 3.5 million barrels from May 2022.
In Saudi Arabia and Russia, baselines are expected to rise from the current 11 million barrels to 11.5 million barrels per day, respectively. In Iraq and Kuwait, the baseline will rise by 150,000 barrels / day, respectively.
Prince Abdul Aziz said Nigeria and Algeria could also have their baselines revised.
He said OPEC + would adjust its policy if Iran reached an agreement with the world’s major powers over a nuclear program and if Iran’s oil returned to the market.
It is estimated that Iran will be able to add approximately 1.5 million barrels per day to its global supply once an agreement is reached and western sanctions are lifted.
By Rania El Gamal, Olesya Astakhova, and Ahmad Ghaddar