The ministers of the OPEC+ countries will have another meeting on Sunday in a bid to reach an agreement over increasing crude oil production. A spat between Saudi Arabia and UAE at a meeting earlier this month had foiled an earlier agreement, which is crucial as global oil prices continue to increase.
The OPEC+ countries had in 2020 decided to make steep production cuts of over 10 million barrels per day(BPD), in the wake of a slump in demand for fossil fuel due to the spread of the COVID-19 pandemic and subsequent lockdowns. However, with the world’s major economies now recovering from the pandemic shock, oil demand has jumped significantly leading to a demand-supply imbalance.
However, an agreement to ease the production cuts to 2 million bpd from August could not be agreed upon at the previous meeting of OPEC+. Saudi Arabia wanted the supply management pact to be extended till December 2022 while the UAE wished to keep it till April 2022. The UAE argued for increasing its oil output quota if the pact was to be extended.
According to the Reuters news report, this time, the OPEC+ countries have already reached a preliminary deal which would involve a gradual increase in oil production till December 2021. The extension of the pact till December 2022 and the increase in quota for countries like UAE, Kuwait and Iraq will be on the table during the Sunday meeting. The UAE’s quota is expected to be increased from 3.168 million bpd to 3.65 million, sources told Reuters.
OPEC+ is an informal agreement of oil-producing nations between Saudi Arabia led OPEC countries and Russia along with its oil allies.
