ROMA – Starting in August, the major oil producing countries will ease their oil production cuts. Green light for 400,000 barrels more every day. A quantity that is deemed sufficient to contain the flare-up in prices, the effect of the recovery of the world economy.
During the OPEC + meeting (also extended to the Russian ally), the same countries extended today’s agreement until the end of 2022. Between September 2021 (when a new meeting is scheduled) and December 2021, producers will the point on the market trend
The agreement had already taken shape at the meeting of 5 July, with an informal via libea to an increase in production of 400,000 barrels per day every month until next year (now confirmed). But the growth in production was deemed insufficient by the United Arab Emirates, determined to pump more crude within the group’s complex quota system.
Oil, that’s why the clash between OPEC + and the United Arab Emirates could drive up inflation
by Luca Pagni
Initially, the producing countries had thought of extending the pact until April 2022, to leave more room for maneuver in the event that the global recovery stops due to new virus variants.
At this point, the UAE had opposed the Saudi idea of extending the pact until December 2022 without obtaining a much higher production quota of 400,000 barrels per day.
To overcome the disagreement, OPEC + has agreed on new production quotas for several members starting in May 2022, including the United Arab Emirates, Saudi Arabia, Russia, Kuwait and Iraq.
The UAE will see its base production, from which the cuts are calculated, increase to 3.5 million barrels from May 2022 from the current 3,168 million. Saudi Arabia and Russia will see their baselines rise to 11.5 million each from the current 11 million. Iraq and Kuwait will see their baselines increase by 150,000 barrels each.
Russian Deputy Prime Minister Alexander Novak explains that Russia will start increasing monthly oil production by 100,000 barrels a day from this August and will reach pre-crisis production level in May 2022. Russia will also produce around 21 million tons of oil. oil this year and next, he adds, with significant benefits for the state budget.
Last year, OPEC + cut production by 10 million barrels a day amid a collapse in demand and prices caused by the pandemic. It gradually replenished part of the offer, leaving around 5.8 million barrels in the pits.
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