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News // Middle East and OPEC

OPEC+ agrees to increase global oil production by nearly 1 mln barrels per day

25 June 2018 , 00:04Neftegaz.RU890

Vienna, June 25 - Neftegaz.RU. OPEC and non-OPEC oil producers agreed on June 23 to share increased oil production in a move that is seen as stabilizing global energy prices.

 

The OPEC met in Vienna, announcing a 1 million barrel daily output increase from next month, expected to average at around 600,000 barrels.

 

The OPEC did not give the details of how it would split the production increase, even without giving directly the amount of oil production increase. The agreement would be implemented in July.

Out of its 14 members, some including Iran, Iraq, Venezuela and Algeria were opposed to a major  increase in production.

Iran currently has sanctions imposed on its exports by the US, meanwhile an economic collapse in Venezuela has greatly impacted its output.

On June 23, Russian Energy Minister Alexander Novak said his nation supports a boost of a million gallons a day boost starting next month. Russia had originally wanted a 1.5 million increase. With oil prices hitting $80 a barrel last month for the 1st time in 3 years, Novak said the market needed to be rebalanced.

 

Saud Arabia's minister of energy, Khalid Al-Falih, said after the meeting «Saudi Arabia obviously can deliver as much as the market would need, but we're going to be respectful of the 1 million barrel cap — and at the same time be respectful of allocating some of that to countries that deliver it».

Saudi Aramco, the nation's oil company, has been ramping up production to increase exports from ports in July. «Ships have been scheduled, and it will be hitting the markets, I assume, in August,» he said.

 

U.S. President Donald Trump posted on June 22 on Twitter: «Hope OPEC will increase output substantially,» Trump said on Twitter. «Need to keep prices down!»

 

When asked if tweets by the president urging OPEC to keep prices down factored into the country’s move, Alexander Novak told CNBC's Steve Sedgwick that «the US is just another consumer, like the rest of consumers, and when we make decisions we take into account the interests of the consumers, not just those of producers.»

 

The Russian minister added: «I would like to stress that our offer to increase production volumes in June was made well before the appearance of certain tweets. I’d like to note that Russia had proposed to ease the quotas back at the end of last year, and we began to discuss in detail in February this year.»

 

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