OPEC+ reached an agreement to increase production

On July 18, the 19th ministerial meeting between OPEC and non-OPEC oil-producing countries was held in the form of video. The participating countries reached an agreement on gradually increasing production from August this year. OPEC and non-OPEC member states have reached the following consensus:

1. Extend the OPEC+ production reduction agreement that began in April 2020 to December 31, 2022;

2. Starting from August 2021, the monthly output will be increased by 400,000 barrels/day, until the voluntary production reduction of 5.8 million barrels/day is fully restored;

3. Increase the production quotas of some oil-producing countries, which will take effect from 2022. From May 2022, the UAE’s new benchmark for crude oil production reduction will be 3.5 million barrels per day, an increase of 332,000 barrels per day from the previous period. The production benchmarks were increased by 150,000 barrels/day, and the production benchmarks for Saudi Arabia and Russia were increased by 500,000 barrels/day;

4. At the end of 2021, the crude oil production plan will be reassessed based on market progress.

According to the latest plan, the UAE’s production benchmark will rise from the current 3.2 million barrels per day to 3.5 million barrels per day. Previously, the UAE’s request was to increase the baseline to 3.84 million barrels per day.

The benchmarks of Saudi Arabia and Russia will both rise from 11 million barrels/day to 11.5 million barrels/day, while the benchmarks of Iraq and Kuwait will increase by 150,000 barrels/day to 4.8 million barrels/day and 3 million barrels/day.