Nour-Sultan/London—OPEC+ is set to raise its oil production target by 100,000 barrels per day. Analysts said it was an insult to President Joe Biden during his visit to Saudi Arabia. US and global economy.
The increase equates to 86 seconds of global oil demand in a day, and Biden’s trip to the Middle East and Washington’s approval to sell missile defense systems to Riyadh and the United Arab Emirates will bring more oil to global markets. Following weeks of speculation.
“It’s meaningless little. From a physical point of view, it’s a slight blip. As a political gesture, it’s almost insulting,” said Eurasia Group’s managing director for energy, climate and sustainability. Director Lard Alkadiri said.
The 100,000 bpd increase would be one of the smallest since OPEC quotas were introduced in 1982, OPEC data show.
The Organization of the Petroleum Exporting Countries and its allies, led by Russia, a group known as OPEC+, formed in 2017, are making about 10,000 oil a month to lift record supply cuts introduced when the pandemic lockdowns ended. It was increasing production from 430,000 to 650,000 bpd. demand.
However, most Member States struggled to meet their full targets as years of poor investment in new capacity had exhausted their potential output.
Shortages in reserve supplies, combined with war-related disruptions in Ukraine, are driving up energy markets and fueling inflation.
The president traveled to Riyadh last month to mend ties with Saudi Arabia, which fell apart four years ago following the murder of journalist Jamal Khashoggi, amid US inflation at its highest level in nearly four decades.
Saudi Arabia’s de facto ruler, Crown Prince Mohammed bin Salman, also visited France last month as part of an effort to rebuild ties with the West.
On Tuesday, Washington approved the sale of $5.3 billion worth of defense missile systems to the UAE and Saudi Arabia, but has yet to lift a ban on offensive weapons sales to Riyadh.
OPEC+, whose next meeting is scheduled for Sept. 5, said in a statement that reserve capacity is limited and must be used with extreme caution to deal with severe supply disruptions. said.
It also said a chronic lack of investment in the oil sector will affect sufficient supply to meet rising demand beyond 2023.
Benchmark Brent crude futures jumped about $2 a barrel after OPEC decided to trade near $101 a barrel.
By September, OPEC+ intended to roll back all the record cuts it implemented in 2020 in response to the impact of the pandemic.
By June, however, OPEC+ output had reduced its quota to about below 3 million barrels.
Only Saudi Arabia and the United Arab Emirates are believed to have any reserve capacity.
Maha El Dahan and Ahmad Gadar