Organisation of Petroleum Exporting Countries announces to raise oil production
Vienna: The Organisation of Petroleum Exporting Countries (OPEC) on Friday announced an agreement to raise oil output which, in accord with non-OPEC producers, had been reduced last year in order to boost prices that had been in free fall mainly due to a supply glut.
Following a ministerial meeting here of the 14-nation cartel, the statement released, however, did not provide any details of the production increases to be allocated among members.
Current OPEC Chairman, the UAE Energy Minister Suhail Mohamed Al Mazrouei, told reporters after the meeting that the increase agreed upon is “a little bit less than 1 million barrels” over OPEC’s current output.
OPEC and non-OPEC producers, including Russia, had put in place 1.2 million barrels per day (bpd) cut from January 2017, which helped boost crude prices go over $80 a barrel last month.
Al Mazrouei said that OPEC had made “the best choice” in balancing the interests of its members and other producers.
“How is it allocated? I think that is not yet decided due to the fact that there are differences between certain countries. It would not make sense if we allocated production to a country that cannot produce it, so we avoided having allocations from that perspective,” he said.
An OPEC statement said: “The Conference noted that the oil market situation has further improved over the past six months, with the global economy remaining strong, oil demand relatively robust, albeit with some uncertainties, and with the market rebalancing evidently continuing.”
Friday’s agreement to increase production came after three days of negotiations because only a few members like Saudi Arabia, the UAE and Kuwait have the ability to increase output.
The OPEC meeting comes at a crucial time when global crude oil prices are at the highest since the peak of 2014, pushed up also by current geopolitical tensions in the Middle East.
Earlier this week, Indian Petroleum Minister Dharmendra Pradhan urged the OPEC to move to responsible pricing of oil and gas, saying the current prices are posing a threat to fragile world economic growth.
Addressing an OPEC seminar here, Pradhan said global trade practices in the hydrocarbons sector are not contributing to energy access and affordability to all.
Image source: Encyclopedia Britannica