Representatives of seven important companies, meeting electronically this Sunday, announced that the alliance’s production will be increased by 188,000 barrels per day (bd) starting in June.
In a statement, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, recall that this “voluntary adjustment” is added to the one announced last April (206,000 bd), which “reaffirms its commitment to market stability.”
The seven countries meeting today are Saudi Arabia, Iraq, Kuwait and Algeria (all OPEC) as well as Russia, Oman and Kazakhstan. “Countries will continue to closely monitor and evaluate market conditions and, in its continuous efforts to support its stability,” states the note of the seven.
The increase announced today is only theoretical, since producers in the Persian Gulf are still unable to export part of their crude oil due to the blockade of the Strait of Hormuz due to the unresolved war between Iran and the United States.
Next meeting in June
The next meeting scheduled between the seven major producers was announced for next June 7, coinciding with a meeting of the so-called ‘Joint Ministerial Monitoring Committee’ (JMMS) of OPEC+.
This is the third consecutive increase in production this year, announced just two days after the departure of the United Arab Emirates (UAE) from OPEC and the alliance.
In the two previous meetings this year, increases of 206,000 barrels per day were agreed, so the increase now seems to be the same, only subtracting the participation of the UAE.
Due to the war in Iran and the problems in the Strait of Hormuz, through which 20% of exported crude oil passes, the accumulated production of OPEC countries fell by 27.5% in March.
Only a few OPEC members – primarily Saudi Arabia – have spare capacity to increase production.
The Emirates, which were in dispute with the Saudis for years over production quotas, hope to be able to increase their output from the usual 3.4 million to about 5 million barrels per day once the situation in the Gulf has stabilized.
Unlike other Gulf countries, the UAE’s economy is becoming less dependent on oil revenues.
Crude oil prices rose this past week to new highs in four years in the absence of an agreement between Iran and the United States to end the war.
Many analysts fear that in the coming weeks there will be a series of cuts in supplies of oil and refined products, such as kerosene, which could once again boost inflation in many industrialized countries.
