June 18, 2024

OPEC + meets to accept oil supply stimulus as prices rise

2 min read

OPEC + ministers will meet on Sunday, another attempt to accept the rapid oil supply boost Oil prices As the world economy recovers International spread of corona virus.

The group, which includes allies such as OPEC and Russia, failed to resolve a disagreement over a new publishing policy between Saudi Arabia and the United Arab Emirates (UAE) earlier this month.

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OPEC + agreed last year to cut cuts by nearly 10 million barrels per day (bpd), gradually easing them to 5.8 million bpd to cope with an epidemic-induced demand.

The group had planned to cut the cut further by 2 million ppm from August to December 2021 as oil prices soared to a 2-1 / 2 year high.

OPEC + sources told Reuters on Sunday that major OPEC + makers had reached a preliminary agreement on gradually increasing oil production until December 2021 and extending their overall contract until the end of 2022, but some details have not yet been agreed.

Although Riyadh and the United Arab Emirates supported the immediate release stimulus, the United Arab Emirates objected to the Saudi idea of ​​extending the overall supply management agreement until December 2022.

Rising gas prices ‘soon,’ the expert says

The UAE has argued that it wants a higher release quota if the deal is to be extended.

Three OPEC + sources say that more release allocations to the United Arab Emirates and the possibility of other members such as Iraq and Kuwait will be on the agenda on Sunday.

Producers need to determine when the higher release quotas known as bases will be set. Sources told Reuters that the UAE could see its base increase from the current 3.168 million to 3.65 million ppm from 20 April 2022.

It is not clear from which month OPEC + will release more oil to the market – August could be difficult as Saudi Arabia has already set an official selling price for its oil and the release of extra barrels may upset existing customers.

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The meeting on Sunday is expected to begin at 1000 GMT, OPEC said.

(Report by Olesya Astakova, Rania L. Kamal and Dmitry Zhtanikov; Written by Dmitry Zhtanikov; Editing by Elaine Hartkostel)

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