OPEC+ to Increase Production by 400,000 Barrels per Day Starting Next Month... Agrees to Further Easing of Additional Cuts (Comprehensive)

Oil-producing countries agree to ease production cuts until the end of next year

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Daehyun] The 'OPEC Plus (OPEC+)' has agreed to implement a policy to ease additional production cuts starting next month. OPEC+ is a coalition of major oil-producing countries, including the Organization of the Petroleum Exporting Countries (OPEC) and Russia.

According to major foreign media such as The Wall Street Journal (WSJ) on the 18th (local time), OPEC+ held a meeting of oil ministers and agreed to take additional measures to ease production cuts starting in August. The new crude oil production standards will be applied from May next year.

In a statement issued that day, OPEC+ said, "We recognize clear signs that market demand is improving along with continuously strong fundamentals."

Accordingly, OPEC+ plans to increase crude oil production by an additional 400,000 barrels per day starting next month and raise it to a total of 2 million barrels per day by the end of this year.

This appears to be the result of Saudi Arabia and the United Arab Emirates (UAE), which had conflicting opinions regarding oil production policies, adjusting the crude oil production standards to narrow their differences. The UAE will increase its current production from 3.2 million barrels per day to 3.5 million barrels per day.

It is also reported that not only the UAE but also Iraq, Kuwait, and Russia have raised their crude oil production volumes at this meeting.

Additionally, OPEC+ oil-producing countries extended the deadline for the agreement to ease production cuts, originally set until April next year, to the end of next year. Bloomberg News reported that this agreement could increase crude oil production, thereby easing upward pressure on oil prices and inflation.

Previously, in May last year, OPEC+ decided on production cuts of about 10% of the world's production at the time, approximately 10 million barrels per day, in response to the demand decrease caused by the COVID-19 pandemic, and subsequently agreed to gradually reduce the scale of cuts until April 2022.

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