OPEC+ commits to increase production and change the base month to that date
The OPEC+ alliance met on Sunday and adopted a number of resolutions that were voted on, in a way that serves the stability of the global oil market. It announced the extension of the oil production agreement until the end of 2022 instead of next April, with the approval of increasing production by 400 thousand barrels a day each month as of next August.
According to the OPEC+ alliance, compliance with the production agreement among member states reached 113% in June.
During the meeting, it was decided to raise the OPEC+ production baseline from 43.8 to 45.5 million barrels per day as of May 2022. A gradual increase in production was agreed upon as of next August, with the Saudi Arabian and Russian production baseline increasing by 500 thousand barrels each from 11 to 11.5 million barrels per day as of May 2022.
The UAE’s production baseline was set at 3.5 million barrels per day, and the baseline for Kuwait and Iraq was increased by 150 thousand barrels per day as of May 2022.
UAE Minister of Energy and Infrastructure Suhail bin Mohammed Faraj al-Mazroui said Sunday that the UAE supports the agreement reached by the OPEC+ group.
Earlier this month, the UAE proposed two key issues to stabilize the oil market: an increase in production by members in August; and an amendment to the UAE’s oil production baseline.
An OPEC+ meeting earlier this month failed to reach a final wording on the working mechanism in August.
Three months ago, OPEC+ members agreed to reduce production from May to July, with current output reduced by 5.8 million barrels per day, compared to a 7-million reduction at the end of April. OPEC+ countries began in May 2020 to reduce production by 9.7 million barrels per day, which represents 10% of global crude consumption, and production constraints were subsequently eased.
