The Organization of Petroleum Exporting Countries (OPEC) and its allies within the framework of “OPEC +” approved an increase in oil supplies by about 50 percent, following months of continuous pressure from major consuming countries, led by the United States, which welcomed the decision immediately after its issuance.
The Joint Ministerial Monitoring Committee of “OPEC +” approved an increase in oil production by 648,000 barrels per day during the months of July and August, exceeding observers’ expectations, and exceeding the previous monthly increases of 432,000 barrels per day.
The decision coincided with the adoption by the EU of a partial embargo on Russian oil today.
The additional increase came mainly from Iraq by 71 thousand barrels, the UAE (52 thousand), and Kuwait (44 thousand). While the level of production increase for Saudi Arabia and Russia was maintained at 170,000 barrels each, to 10.833 million barrels per day.
Oil production in Saudi Arabia and Russia will rise by 170,000 barrels per day in July, to 10,833 million barrels per day, under the new production quotas.
Next month, Algeria’s production will reach 1.039 million barrels per day, an increase of 16,000 barrels per day compared to June.
The UAE’s production will increase by 52 thousand barrels per day, to reach 3.127 million barrels per day in July.
Iraq’s production will reach 4.580 million barrels per day next month, an increase of 71 thousand barrels per day, according to the statement of oil production quotas, which was seen by the Specialized Energy Platform.
The alliance stressed the importance of having stable and balanced markets for crude oil and refined products.
It pointed to the end of the closures caused by the Coronavirus pandemic in the main global economic centers, expecting that the consumption of global refineries will increase after seasonal maintenance.
The coalition decided to extend the compensation period until the end of December 2022, as required by some poor-performing countries, provided that these countries present their plans by June 17.
The next OPEC + ministerial meeting is scheduled for June 30, 2022, according to a press release issued by the alliance.
Oil prices fell
Immediately after the increase was announced, the price of Brent crude fell by less than 1 percent to $115.32 a barrel for August contracts, and West Texas crude for July delivery fell by almost the same percentage to $114.39 a barrel.
Oil prices fell to nearly $113 a barrel this morning, affected by reports that Saudi is ready to pump more crude if Russian production drops significantly due to increased sanctions due to its invasion of Ukraine.
And Saudi, the largest oil-producing country in the “OPEC”, had previously rejected US calls to increase oil production by more than the gradual increase agreed upon with the rest of the OPEC + member states.