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OPEC+ agrees to boost oil supply after UAE’s argument with Saudi

By Rania El Gamal, Olesya Astakhova and Ahmed Ghadari

MOSCOW/DUBAI/LONDON (Reuters) – OPEC+ ministers on Sunday agreed to cool prices to boost oil supplies, which have climbed to 2-1/2-year highs since August. The global economy recovers from the coronavirus pandemic.

The group, which includes OPEC countries and allies such as Russia, agreed significantly on new production allocations from May 2022 after Saudi Arabia and others agreed to a request by the United Arab Emirates (UAE) that threatened the plan. was.

“We are pleased with the deal,” UAE’s Energy Minister Suhail bin Mohammed Al-Mazrouei told a news conference. Saudi Energy Minister, Prince Abdulaziz bin Salman, declined to answer questions about how the agreement was reached.

OPEC+ cut output by a record 10 million barrels per day (bpd) last year, amid a pandemic-induced slowdown in demand and falling prices. It has gradually restored some supply leaving it with a shortfall of about 5.8 million bpd.

OPEC said in a statement that the group would increase supplies by 2 million bpd, or 0.4 million bpd per month, from August to December 2021.[O/R]

The group had agreed to extend its overall agreement from the previously planned date of April 2022 to the end of 2022, to leave more room for maneuver in case the global recovery stalls due to new virus variants.

While both Riyadh and the UAE were supportive of an immediate production boost, the UAE objected to the Saudi idea of ​​extending the agreement to December 2022 without achieving higher production quotas.

To address disagreements, OPEC+ agreed new output quotas from May 2022 for several members, including the United Arab Emirates, Saudi Arabia, Russia, Kuwait and Iraq.

According to Reuters calculations, the overall adjustment would add 1.63 million bpd to supply from May next year.

The United Arab Emirates will see its baseline production, from which the cuts are calculated, increase by 3.5 million bpd from today’s 3.168 million from May 2022.

Saudi and Russia will increase their baseline to 11.5 million bpd from the current 11 million. Iraq and Kuwait would each increase their baseline by 150,000 bpd.

Prince Abdulaziz said Nigeria and Algeria could also see their baselines revised.

(Reporting by Olesya Astakhova, Rania El Gamal, Alex Lawler, Ahmed Ghaddar, Vladimir Soldatkin and Dmitry Zhdannikov; Writing by Dmitry Zhdannikov; Editing by Elaine Hardcastle and Philip Fletcher)

(Only the title and image in this report may have been reworked by Business Standard staff; the rest of the content is generated automatically from a syndicated feed.)

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