OPEC+ Decides Gradual Production Increase Starting Next Month... International Oil Prices Up 3.9% (Comprehensive)

Saudi Arabia to Gradually Ease Existing Production Cuts by July
Summer Demand Surge Expected...Monthly Meetings to Adjust Output
Gradual Increase Decision Pushes International Oil Prices Up...WTI Rises 3.9%

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] International oil prices rebounded after three days following the announcement by OPEC+?a coalition of the Organization of the Petroleum Exporting Countries (OPEC) and major oil-producing countries including Russia?that gradual production increases will be allowed from next month through July. This is analyzed to be due to the production increase being smaller than expected and the expectation that the global demand rise will sustain the upward trend in international oil prices. OPEC+ member countries are known to plan monthly meetings to adjust production volumes according to the international oil price situation.

On the 1st (local time), international oil prices surged more than 3%. At the New York Mercantile Exchange (NYMEX) that day, West Texas Intermediate (WTI) crude oil closed at $61.45 per barrel, up $2.29 (3.9%) from the previous session. Brent crude on the London ICE Futures Exchange also jumped $2.12 (3.4%) to $64.86 per barrel. The production increase announced by OPEC+ countries was smaller than expected, combined with expectations of increased international oil demand during the summer, leading to the rebound after three days.

According to foreign media including Bloomberg News, at the OPEC+ oil ministers’ meeting held via video conference that day, member countries agreed to gradually ease existing production cuts and allow incremental production increases from next month through July. The members announced in a statement immediately after the meeting that they would increase daily oil production by no more than 500,000 barrels per month until July.

Russia’s TASS news agency, citing sources within OPEC+, reported that member countries agreed to ease daily production cuts by 350,000 barrels each in May and June, and by 400,000 barrels in July. According to this plan, Saudi Arabia’s current production cut of 1 million barrels per day is expected to conclude in July.

Saudi Energy Minister Abdulaziz bin Salman also emphasized, “Saudi Arabia’s current voluntary daily cut of 1 million barrels will be gradually reduced until July,” adding, “This production increase decision is a very conservative measure, and there was no influence from the United States in reaching the agreement.” Iranian Oil Minister Bijan Namdar Zanganeh stated at a press conference after the meeting, “It was decided to increase daily production by a total of 1.1 million barrels over the next three months until July.”

OPEC+ is scheduled to hold another oil ministers’ meeting on the 28th of this month to adjust production volumes. In January, OPEC+ reduced the scale of production cuts from 7.7 million barrels per day to 7.2 million barrels per day and decided to hold meetings every one to two months from January to determine the following month’s production volume. Going forward, OPEC+ plans to hold monthly oil ministers’ meetings to adjust production volumes according to international oil prices and market demand conditions.

This content was produced with the assistance of AI translation services.