Russia and OPEC agreed to increase oil production quota in September
The Organization of Petroleum Exporting Countries and Non-OPEC+ (OPEC+) will increase oil production in September by 100,000 barrels per day (b/d), story in the communiqué following the 31st Ministerial Meeting. In accordance with the approved table Russia and Saudi Arabia may add 26,000 bpd. The next meeting will take place on September 5th.
“In terms of the global balance sheet today, the meager increase in quotas — the smallest since 1986 in absolute terms and the smallest ever in percentage terms — is noise.” said said President of Bloomberg Bob McNally, a Washington consulting company Rapidan Energy Group and a former White House staffer.
The communiqué states that OPEC+ currently has a “very limited” amount of capacity expansion, so they need to be used with “great caution” given the severe disruption to supply. The reduction in capacity was due to the “chronic” inflow of investments in the oil sector, it is specified there.
At the same time, emergency oil reserves have reduced the level for more than 30 years, used in OPEC +, to the maximum. Preliminary figures put OECD commercial oil inventories at 2,712 million barrels, down 163 million barrels from the same period last year and 236 million barrels below the 2015-2019 average.
In early May, OPEC+ decided not to deviate from the planned increase in profits and increase it by 432,000 b/d. Bloomberg reports that the cartel will continue to discover the plan. At the same time, US President Joe Biden urged exporters to increase production beyond plans, but Saudi Arabia and its partners, which have untapped reserve capacity per working barrels, are absolutely adamant, writes Bloomberg. After that, at a meeting on June 2, OPEC + nevertheless increased the oil production plan for July by 200,000 bpd.
The OPEC+ coalition includes ten countries. Among them are Russia, Oman, Sudan and South Sudan, Azerbaijan, Kazakhstan.