A meeting of OPEC+ oil-producing countries, which previously failed to reach an agreement to increase oil production due to opposition by the United Arab Emirates (UAE) earlier this month, is known to have agreed to increase oil production on the 18th (local time). Oil-producing countries agreed to extend the limits on production increases in some member countries, including the UAE, while implementing most of the agreement on the second day.
The Wall Street Journal (WSJ) reported on the 18th that OPEC+ has agreed to increase production by 400,000 barrels per day between August and September next year. In addition, it was decided to extend the deadline for the production cut agreement, which was previously set for April next year, until the end of the year.
In December 2016, the Organization of the Petroleum Exporting Countries (OPEC) and ten non-OPEC oil producing countries, including Russia, launched OPEC+ to alleviate low oil prices and increase/reduce production. In response to the global pandemic in May last year, OPEC+ decided to reduce production by 10 million barrels per day, or 10% of global production at the time. Reductions are scheduled for April 2022. Currently, production has been cut by 5.8 million barrels per day.
During the 18th meeting, most of the agreements reached on the 2nd were implemented. Attempting to build an oil-free economy, the UAE planned to produce and sell as much as possible when oil prices were high, but the agreement was postponed on the 2nd when other member countries limited UAE production. The UAE was appeased by OPEC+ members by increasing the country’s production quota from 3.2 million barrels per day to 3.5 million barrels per day. Iraq and Kuwait will each increase their average daily production by 150,000 barrels, while Saudi Arabia and Russia will each increase their average daily production from 11 million barrels to 11.5 million barrels. Next May, the new oil production rates by country will take effect.
According to foreign media, 1.63 million barrels of oil will be provided to the market every month from May next year, once the quota adjustments are completed. Likewise, it was predicted that the stabilization of oil prices would also reduce inflationary pressure.