The world's major oil producers Sunday agreed on their much-expected production policy as of August after dissolving previous meetings due to insistence of United Arab Emirates (UAE) on updating its output baseline.
The 23-members of the Organization of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, held the 19th Ministerial Meeting via videoconference.
The group increased the output by 400,000 barrels per day (bpd) from August to December. The group also extended its production cut agreement from April 2022 to December 2022.
The OPEC+ ministers also agreed to rise the production baselines of the UAE, Iraq, Kuwait, Saudi Arabia and Russia starting from May 2022.
In line with the new agreement, the UAE’s baseline will be increased from 3.168 million to 3.5 million, Iraq’s from 4.653 to 4.803 million, and Saudi Arabia and Russia's from 11 million to 11.5 million.
Sunday’s 400,000 bpd output rise was actually in line with an OPEC+ decision last year when the group agreed to cut output about 10 million bpd to deal with a pandemic-induced downturn in demand. The curbs have been gradually eased since then and currently stand at roughly 5.8 million bpd.
The group’s ministerial meeting on July 1 was postponed twice and finally called off without setting a new date due to major disagreements between Saudi Arabia and the UAE.
However, the UAE had only approved the production rise and extension of the deal on the condition that its production baseline was increased from around 3.2 bpd, a level which had been determined in another deal signed in October 2018.
The next OPEC and non-OPEC Ministerial Meeting will be held on Sep. 1./aa