The Organization of the Petroleum Exporting Countries (OPEC) and association including Russia, known as OPEC+, agreed to increase output by 648,000 barrels per day (bpd) in July and 648,000 bpd in August. Ahead of the meeting, sources told Reuters that Saudi Arabia and other OPEC members could increase oil output to offset a drop in Russian production.
Some OPEC members were considering the idea of suspending Russia in an oil production deal as Western sanctions cut the nation’s ability to produce more, the Wall Street Journal reported on May 31, citing OPEC representatives. Exempting Russia could have paved the way for Saudi Arabia, the United Arab Emirates and other OPEC members to produce more to meet the production targets.
Oil prices have moved to above $100 a barrel since the Russian invasion of Ukraine and countries including the U.S. have forced a hike in production to bring prices down. There are fears that raised energy prices could slow the international economy as it emerges from Covid. An OPEC+ technical committee cut its forecast for the 2022 oil market surplus by about 500,000 bpd to 1.4 million bpd, two OPEC+ sources had said.
Thursday the decision steps up the pace by the alliance, known as OPEC+, in restoring cuts made during the worst of the pandemic recession. The group had been adding a steady 432,000 barrels per day each month to slowly restore production cuts from 2020.
