19.07.2021 – 09:36
The Organization of the Petroleum Exporting Countries (OPEC) and its allies have agreed to increase oil supplies starting in August, as prices reached a three-year high as economies recover from the Covid-19 pandemic.
The cartel members and their allies, including Russia, Mexico and Bahrain, will increase their production by 400,000 barrels per day from August. Production is expected to increase until all previously banned production is restored.
The deal is expected to see OPEC + countries increase their total output by about two million barrels by the end of the year. Monthly production increases will then continue next year. The cartel and its allies also announced that they have extended the general agreement until December 2022. It was previously scheduled to expire in April 2022.
The deal has become a sign of the strong bond between the cartel families shows that “OPEC + is here to stay”, and journalists Saudi Energy Minister Prince Abdulaziz bin Salman after the video conference between members.
Decision and rush from a game on oil prices, which have reached a three-year record. The price of Brent crude oil has recently risen above $ 75 a barrel amid a recovery in demand for oil.
Several media outlets, including the Financial Times, report that prices may rise further as they rise and are planned if you can live long enough to meet demand at your level.
“The meeting noted the continued strengthening of market bases, with oil demand showing clear signs of improvement.” OPEC said in a statement after the talks.
In 2020, OPEC + cut their production by a record 10 million barrels per day after blockages and flight bans led to a sharp drop in demand. Oil exporters then gradually restored some supplies, but they still hold about 5.8 million barrels per day of production. The cartel and its allies are expected to return to pre-pandemic production levels by the end of 2022 if the agreement is implemented.
The deal also included a compromise between OPEC members Saudi Arabia and the United Arab Emirates. The two Gulf countries were embroiled in a dispute as the UAE was unwilling to extend the previously reached supply-cutting agreement beyond April 2022 without increasing their production quota.
The deal raises the UAE’s production base from 3.2 million barrels per day to 3.5 million barrels per day starting in May 2022, various media reported. “We strongly support the agreement reached.” told UAE Minister Suhail al-Mazrouei to an Egyptian broadcaster.
Other members of the OPEC + deal, including Saudi Arabia, Russia, Kuwait and Iraq, will also see their quotas raised. Russian Deputy Prime Minister Alexander Novak said on Sunday that his nation would increase its production by 100,000 barrels per day every month starting in August and reach a pre-pandemic production level in May 2022.
Russia will produce an additional 21 million tonnes of oil this year and next, he added.
Translated and adapted for Konica.al by RT