The Organization of Petroleum Exporting Countries (OPEC+) has agreed to increase oil supplies from August to boost the global economic recovery.

In a statement, OPEC+ said 23 members of the group had agreed from August to December to supply the market with an additional 2 million bpd, which means an increase in output by 400,000 bpd per month.
OPEC+ last year cut production by a record 10 million barrels per day (bpd) amid a pandemic-induced drop in demand and plunging prices. Supply gradually recovered with a decrease of about 5.8 million bpd.
“We are very happy with this agreement,” UAE Energy Minister Suhail bin Mohammed al-Mazroui told a news conference.
At the OPEC+ meeting earlier this month, member countries failed to agree on plans to gradually ease production cuts. The deadlock stems from disagreements between Saudi Arabia and the United Arab Emirates (UAE).
While both Riyadh and the UAE are in favor of an immediate output increase, the UAE has opposed Saudi Arabia’s idea of ​​extending the agreement to December 2022 if the UAE fails to obtain a higher output quota.
To overcome the disagreement, OPEC+ agreed to new output quotas for several members from May 2022, including the UAE, Saudi Arabia, Russia, Kuwait and Iraq. Accordingly, the UAE’s base quota will increase to 3.5 million bpd from May 2022 from 3,168 million bpd today.

Saudi Arabia and Russia base quotas increased to 11.5 million bpd from the current 11 million. Iraq and Kuwait quotas increased by 150,000 bpd.
Iran is estimated to be able to add about 1.5 million bpd to global supply when a deal is reached and Western sanctions are lifted.

Source: VITIC/Reuters

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