The 15th OPEC+ Ministerial Meeting has announced that the members of the group would gradually increase oil production over the next three months.
Under the agreement, Opec+, which includes Russia, will increase output by 350,000 barrels a day in both May and June and by 441,000 barrels a day in July. Over the same period, Saudi Arabia will gradually unwind additional cuts of 1 million barrels a day that it has been making voluntarily, reports said.
It’s estimated that Opec+ has been withholding 8 million barrels a day from the market.
Reports said Russia and some other producers are eager to raise output to take advantage of a likely growing global thirst for oil.
The Saudis “decided to go with the consensus of the members,” said Helima Croft, a commodity strategist at RBC Capital Markets, an investment bank.
Prince Abdulaziz said during a news conference after the meeting that Opec+ wanted to test out increased production but would still be able to change plans if demand failed to materialise.
“We can freeze; we can increase; we can decrease,” he said.
For now, the oil market has accepted the prospect of increases that would amount to less than 1% of global consumption per month.
Opec’s willingness to increase output is seen as a vote of confidence in the global economic recovery, said Croft.
Meanwhile, commended the Kingdom of Saudi Arabia for “Saudi Green Initiative” and “Middle East Green Initiative”, which have been recently announced by His Royal Highness Prince Mohammed bin Salman bin Abdulaziz, Crown Prince, Deputy Prime Minister and Minister of Defense, as important contributions to global efforts to combat climate change.
The meeting welcomed the Kingdom’s commitment to transfer knowledge and share experiences as part of these initiatives.
OPEC+ commended the G20 leaders’ support for the Kingdom’s initiative to deal with climate change by adopting the circular carbon economy initiative, as a comprehensive and balanced solution to deal with greenhouse gas emissions.