SULAIMANI (ESTA) — OPEC+ producers agreed on Sunday to boost oil supply from August to cool prices which have climbed to 2-1/2 year highs as the global economy recovers from the coronavirus pandemic.
OPEC and its allies on Sunday agreed to gradually add more oil supplies to the market, the group said in a statement.
OPEC+ ministers held an online meeting in another attempt to agree a quick oil supply boost to address soaring prices as the global economy recovers from the coronavirus pandemic.
An attempt earlier this month by the group, which includes OPEC countries and allies like Russia, to agree on a new output policy failed because of differences between Saudi Arabia and the United Arab Emirates (UAE).
The group, which includes OPEC countries and allies like Russia, agreed new production allocations from May 2022 to overcome differences between Saudi Arabia and the United Arab Emirates (UAE) that threatened the plan, according to Reuters.
From August until December 2021 the group will increase supply by a further 2 million bpd or 0.4 million bpd a month, OPEC said in a statement.
The group had also agreed to extend their overall pact until the end of 2022 from earlier planned date of April 2022, to leave more room for maneuver in case global recovery stalls due to new virus variants, Reuters reported.
To overcome the disagreement, OPEC+ agreed new output quotas for several members from May 2022, including the UAE, Saudi Arabia, Russia, Kuwait and Iraq, according to Reuters.
The overall adjustment will add 1.63 million bpd to supply from May next year, according to Reuters calculations.
The UAE will see its baseline production, from which cuts are being calculated, increase to 3.5 million bpd from May 2022 from today’s 3.168 million.
Saudi and Russia will see their baselines rise to 11.5 million bpd each from the current 11 million.
Saudi Energy Minister Prince Abdulaziz bin Salman celebrated the compromise at the start of the meeting, Bloomberg reported.
“Instead of ‘I am back,’ we will say ‘we are back,’” he said.
OPEC+ last year agreed record output cuts of almost 10 million barrels per day (bpd) amid a pandemic-induced slump in demand and gradually relaxed them to about 5.8 million bpd.
The group had planned to ease the reduction by a further 2 million bpd from August until December 2021 because oil prices have climbed to 2-1/2 year highs.
*This story was updated at 03:14 p.m. EBL time