RIYADH, 3 June – Major oil producers led by Saudi Arabia and Russia agreed on Thursday to increase output by more than expected amid rising prices and a European ban on Russian oil imports.
Analysts had expected the 11-member OPEC+ alliance to maintain their policy of modest output increases, as they have done since May 2021.
However, the group will add 648,000 barrels per day to the market in July, up from 432,000 in previous months, it said after its monthly meeting.
“The meeting highlighted the importance of stable and balanced markets for both crude oil and refined products,” the group said.
The White House said the US welcomed the decision by OPEC+ to increase oil output, and recognized the roles of Saudi Arabia, the UAE, Kuwait and Iraq in securing consensus.
Russia’s invasion of Ukraine has put pressure on supply and sent oil prices soaring.
EU leaders agreed on Monday to ban more than two-thirds of Russian oil imports, Britain will phase them out by the end of 2022, and the US banned Russian oil and gas days after the invasion began on 24 Feb.
Analysts said the OPEC+ output increase would partially compensate for the loss of about 1 million barrels per day in Russian exports, and could affect the course of the war.
“Russia has now transformed into a pariah,” said Bjarne Schieldrop of the SEB banking group.
“More oil from Saudi Arabia and the UAE will allow the West to implement sharper bans, forcing Russian oil exports lower while not blowing up the oil price,” he said. – Arab News