Saudi Arabia and other OPEC+ members agreed to accelerate oil production increases to offset Russian output losses, easing rising oil prices and inflation and paving the way for US President Joe Biden’s ice-breaking visit to Riyadh.
OPEC+ said it had decided to increase output by 648,000 barrels per day (bpd) in July, or 0.7 percent of global demand, and a comparable amount in August, compared to an original agreement to increase output by 432,000 bpd per month over three months until September.
Oil rises towards $117 a barrel as analysts say the real production boost will be insignificant as most OPEC members are already pumping at capacity.
The move will be seen as a sign of willingness by Saudi Arabia and other OPEC Gulf nations to pump more after months of pressure from the West to address global energy shortages.
U.S. diplomats have worked for weeks on organising Biden’s first visit to Riyadh after two years of strained relations between the two countries.
Western sanctions could reduce production from Russia, the world’s second-largest oil exporter, by as much as 2 million to 3 million bpd, according to a range of industry estimates.
Russia was already producing below its OPEC+ target of 10.44 million b/d in April with output running at about 9.3 million bdi.
By September, when the deal expires, the group will have limited spare capacity to lift output further.
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