The Organization of Petroleum Exporting Countries (OPEC) and its allies, led by Russia, today agreed to increase joint production in a staggered manner over the next five months, starting in August.
In a statement quoted by EFE, the OPEC secretariat explained that the increase in production will begin next August, with a addition of 400,000 barrels per day (mbd), every month, until December.
Additionally, the ministers of the alliance, known as OPEC+, agreed to extend until the end of 2022 the production cut, scheduled for April 2020, by 9.7 million barrels per day (mbd), which will be reduced to 3.8 mbd by December.
With the April 2020 cut, producers reacted to the collapse of world oil demand due to the covid-19 pandemic crisis, which went from almost 100 mbd to around 90 mbd.
Negotiations, in order to avoid new pressures Bullies on oil prices, which in turn threaten global economic growth, lasted about two weeks, with a dispute over the future level of production of each OPEC member.
Regarding the future calculation of production quotas, OPEC and Russia have agreed to make a minor revision that will benefit some members, specifically Russia, Saudi Arabia, UAE, Iraq and Kuwait.
Russia e Saudi Arabia will be able to adjust their calculation basis for an eventual production adjustment in 0.5 million barrels each (up to 11.5 mbd each) from May 2022, while the Emirates will do this in 0.33 mbd, up to 3, 5 mbd.
In case of Iraq e Kuwait, this calculation base increases by 0.15 mbd each to 4.803 mbd (Iraq) and 2.959 mbd (Kuwait).
According to the OPEC statement, the next meeting of alliance ministers is scheduled for September 1st.
The level of compliance with the cut agreed last year was 113% in June, that is, more than agreed.
After five monthly increases in production for the rest of the year, ministers will reassess the situation in December, including the level of compliance with the cuts.