The Opec oil cartel and its partner countries (Opec plus) have agreed on a significant increase in oil production in view of the global economic recovery. From August, the Oil Alliance will increase its daily production by 400,000 barrels (159 liters each) per month for the time being, Opec announced on Sunday after an online ministerial meeting convened shortly. . If market conditions allow, the existing production cut will expire in September 2022, he said.
The consequences of the decision for consumers of heating oil and for motorists are still difficult to predict. Fuel is now as expensive as it was in the fall of 2018. Compared to the summer of 2020, which was marked by the Corona crisis, fuel costs well 20% more.
“We are facing uncertainties,” Saudi Energy Minister Abdulasis bin Salman said of the danger of new corona waves. He said the Oil Alliance would maintain its monthly meetings to assess the market situation. The next meeting of the Oil Alliance is scheduled for September 1.
The 23 states have agreed to a further reduction in funding shares, which should come into effect from May 2022. Saudi Arabia, the United Arab Emirates, Kuwait and Iraq as well as Russia in as the largest partner country benefit. A dispute between Saudi Arabia and the United Arab Emirates over production quotas prevented a deal two weeks ago.
Russian Deputy Prime Minister Alexander Nowak told state television that market demand for oil and petroleum products had increased and there was now a deficit. With OPEC’s decision, oil production will be brought back to pre-corona pandemic levels. “For Russia this means, for example, that we will reach the pre-crisis level next May.”
At the start of the corona pandemic, Allianz Opec plus reduced its daily production by around 9.7 million barrels the previous year. This helped support oil prices, which had fallen sharply due to the global economic crisis. During this time, the oil valve was gradually opened. Cut production is now around 5.7 million barrels per day. Thanks to the production limit, the price of crude oil has increased by about 40% since the start of the year. OPEC assumes that there will be global demand for oil again in 2022, as was the case before the Corona crisis. That would mean a demand of around 100 million barrels per day. Allianz Opec plus supplies around 45 percent.