The world’s top oil producers, known collectively as OPEC+, have agreed to increase output from May to July in expectation of a rise in demand as the global economy recovers from the impact of the Covid-19 pandemic.
The Organization of the Petroleum Exporting Countries, which is led by Russia and Saudi Arabia, has been cutting its total output, after oil prices were hit hard by the spread of Covid-19 last year.
But on Thursday, the 23-nation group agreed to reduce cuts by 350,000 barrels per day (bpd) in May, 350,000 bpd in June, and around another 400,000 bpd in July.
This means the current cuts to output of around 7 million bpd in April – a policy targeted at boosting prices – will be eased to just over 6.5 million a day from May onwards.
Saudi Arabia is also to ease its voluntary cuts of 1 million bpd, Energy Minister and OPEC chair Prince Abdul Aziz Bin Salman said after the meeting.
The gulf nation will add 250,000 barrels a day in May, 350,000 in June, and 400,000 in July, the minister told reporters.
After the meeting, OPEC said in a statement that it would continue to hold monthly meetings to assess market conditions and pledged that adjustments would not exceed 500,000 bpd.
The meeting comes as France is heading back into a national lockdown amid a Covid-19 spike, while other EU states tighten their measures, continuing the pandemic trend of a lessened appetite for oil.
Global travel and tourism remains at a fraction of its pre-Covid levels.
However, in the US, which has progressed further with its vaccine rollout, oil demand has increased. US Energy Secretary Jennifer Granholm said she had had a “productive call” with Prince Abdul Aziz.
Russian Energy Minister Alexander Novak, who co-chaired the OPEC meeting, warned that the group must monitor the markets closely to prevent “overheating or a significant deficit” of oil demand.
Like this story? Share it with a friend!