The Organization of the Petroleum Exporting Countries and allies OPEC+ decided to slightly increase oil production by 100,000 barrels per day, which analysts called an insult to US President Joe Biden after his visit to Saudi Arabia last month.
The goal of that visit was to convince OPEC leaders to produce more oil in order to help the US and the global economy control prices with increased supply. The small increase comes after weeks filled with speculation about whether Biden's trip to the Middle East and the US approval of offensive missile sales to Riyadh and the United Arab Emirates (UAE) would bring more oil to the market.
The OPEC+ document showed that the group is ready to increase production by 100,000 barrels of oil per day (bpd) from September, which some sources confirmed. "It is so small that it is insignificant. From a physical point of view it's a marginal outburst, and as a political gesture it's almost insulting," said Euroasia Groupe Energy, Climate and Sustainability Executive Director Raad Alkadiri.
OPEC and its allies, led by Russia, previously increased production by around 430,000 to 650,000 bpd, although they have struggled to meet their targets, as most members have already exhausted their production potential.
The US has pressed OPEC leaders Saudi Arabia and the UAE to start producing more oil to help contain prices boosted by a recovery in demand and the war in Ukraine. OPEC has refused to move to larger production increases as sources cited a lack of spare capacity among members to add more barrels, as well as the need for further cooperation with Russia as part of the wider OPEC+ group.
Only Saudi Arabia and the UAE are believed to have some spare capacity. French President Emmanuel Macron has said he had been told that Saudi Arabia and the UAE had very limited ability to increase oil production.