OPEC+ agrees oil supply boost from August as UAE wins argument with Saudi

• Financial

On Sunday, representatives of OPEC+ member states had reached an accord to gradually lift output curbs as early as from August this year, largely aimed at rebalancing global crude market with oil prices hovering near a 2-1/2-year highs as the global economy fuelled up following a robust reopening after months-long pandemic restrictions.

In point of fact, according to the latest OPEC+ deal, the 14-member OPEC (Organization of Petroleum Exporting Countries) alongside its Russia-backed allies had agreed to boost output by 2 million barrels per day (bpd) or 0.4 million bpd per month between August to December this year.

However, the group had been forced to trim production by a record 10 million bpd or nearly 12 per cent of entire crude output last year following a pandemic associated upheaval in demand outlook alongside a sharp drawdown in prices, however, OPEC+ had been gradually stepping up outputs since then and currently its supplies were down by 5.8 million bpd from a pre-pandemic level.

OPEC+ agrees oil supply boost

Nevertheless, earlier this month, OPEC+ member states had called off a scheduled policy meet amid a strident conflict of interest between UAE and Saudi, as the Emirati nation had strongly rejected a Saudi proposal to curb outputs at least until end-2022 without allotting additional supplies for United Arab Emirates.

However, followed by the latest OPEC+ announcement, UAE Energy Minister Suhail bin Mohammad al-Mazroui said in a press meet late on Sunday, “We are happy with the deal,” but Saudi Energy Minister Prince Abdul Aziz bin Salman, a step-brother of the Crown Prince Mohammed bin Salman, had declined to disclose the terms upon which the compromise had been reached.

In tandem, OPEC+ had also agreed to leave an option to extend output curbs at least until end-2022 instead of a previously slated date of April 2022, making rooms for further twists if the global economic recovery meets with a ludicrous lull due to an abrupt rise in delta variants.