Opec and its allies Agreement Increasing oil production when prices are soaring, after compromising on how some of the largest members’ production targets are calculated.
All members of the OPEC + group, including the United Arab Emirates, Saudi Arabia, Russia, Iraq and Kuwait, have a higher production baseline (production transactions calculated) with the victory of Abu Dhabi, which threatened to close the deal earlier this month. Level) will be awarded. ..
Result of Long delay The conference should mean increased oil production from members in the coming months, as oil prices soar to their highest levels in three years and could drag economic recovery during the Covid-19 pandemic recovery. is.
Initially, OPEC + will pump an additional 400,000 barrels each month from August, increasing production by a total of about 2 million barrels per day by the end of the year. These monthly production increases will continue next year, and OPEC + states that it has extended its transactions from April 2022 to December 2022.
“The conference noted that oil demand was clearly showing signs of improvement and that market fundamentals were continuously strengthening,” Opec + said in a statement.
Under the agreement, UAE production baselines have complained that they do not reflect increased capacity, but have risen from the current approximately 3.2 mb / d to 3.5 mb / d, according to people familiar with the talks. To do.
Both Saudi Arabia and Russia have their Base line Iraq and Kuwait baselines rose 150,000 b / d to 4.8 mb / d and Kuwait 3 mb / d, respectively, but rose to 11.5 mb / d (from today’s 11 mb / d).
The group of oil producers cut production by about 10 mb / d during the peak of demand-stealing blockades and travel bans in April 2020, but are slowly increasing production as the economy resumes.
The output of about 5.8mb / d is not yet on the market, but its level is expected to recover significantly by the end of 2022.
Brent crude, the international oil benchmark, has soared to over $ 75 a barrel for the first time in three years as demand recovers, and traders warn that the market is tightening rapidly.
Demand is expected to continue to grow, so the question remains whether the amount recovered by OPEC + is sufficient to significantly reduce prices in the coming months.
UAE complaints against the baseline blocked trading earlier this month, Area of responsibility Between Abu Dhabi and Riyadh, Saudi Arabia has traditionally been the most powerful member of the Core Opec group.
This week’s meeting with Saudi Arabia Groundwork For a compromise.
The decision to increase the production baseline for other large members seems to have been calculated to avoid splits in wider groups, but higher until next year when the original deal expires in April 2022. It is unlikely to lead to production targets. The existing baseline remains intact Until then, Opec + said.
The next OPEC + conference will be held on September 1st.
Opec + signs contract to increase oil production
Source link Opec + signs contract to increase oil production