The Organization of Petroleum Exporting Countries and its allies, known as OPEC+, have decided to increase their total output by 0.4 million barrels per day (mbd).
The decision was made yesterday after the 19th OPEC and non-OPEC ministerial meeting. The upward adjustment, according to a statement released following the meeting, will take effect in August.
According to the statement, the participating countries reaffirmed the framework of the Declaration of Cooperation made on 10th of December 2016, which was further endorsed in subsequent meetings, on 12th of April 2020, in light of current oil market fundamentals and consensus on its outlook.
Furthermore, there was a resolution to extend the decision of the 10th OPEC and non-OPEC Ministerial Meeting (April 2020) until December 31, 2022.
The statement also stated that they have decided to increase overall production by 0.4 mb/d every month beginning in August 2021 until the 5.8 mbd production adjustment is phased out and assess market developments and Participating Countries’ performance in December 2021.
Consequently, the meeting would stick to the mechanism of holding monthly OPEC and non-OPEC ministerial meetings for the duration of the cooperation declaration.
Recall that, Ministers from OPEC and non-OPEC countries failed to reach an agreement after a key member left the OPEC+ coalition. The group had previously scheduled a discussion on oil output policy for Monday (5th July).
The OPEC+ alliance agreed in principle to increase production from present levels to satisfy predicted increased demand in H2-2021; from August 2021. The present pact, known as OPEC+, is set to expire in April 2022.
Also, the United Arab Emirates has vehemently opposed a proposed deal by the oil-producing countries’ alliance to increase output, resulting in a stalemate that could derail efforts to contain rising crude prices amid a fragile post-pandemic recovery.