Another maxi production increase since September: the OPEC+ continues its strategy of quick restoration of the offer, launched in April by the eight members who had previously announced additional cuts to production for 2.2 million barrels per day. A mostly obvious decision, which has not had particular impacts on the prices of crude oil, which remain close to 70 dollars a barrel.
The meeting of the OPEC+
Eight members of the “Opec+ – Saudi Arabia, Russia, Iraq, Arab Emirates, Kuwait, Kazakhstan, Algeria, Oman – met on Sunday in videoconference, for a very fast confrontation, at the end of which they decided to increase the oil production of 547,000 barrels per day starting from September.
This is the last of a series of production increases announced in recent months, to re -establish the 2.2 million cuts implemented previously and regain market shares. The group, which produces about half of the world oil, began to increase production on April 1st, first announcing a content increase of 138,000 barrels per day, then from gradually larger increases of 411,000 barrels in May, June and July, 548,000 barrels in August and 547,000 barrels from September. Increases that have so far been well digested from the market, also due to the accumulation of stocks by China.
From September the production fees will be as follows: Algeria 959 thousand barrels, Iraq 4.22 million, Kuwait 4.58 million, Saudi Arabia 9.98 million, Arab Emirates 3.37 million, Kazakhstan 1.55 million, Oman 801 thousand, Russia 9.45 million. The eight countries will meet again on September 7, when they could evaluate the possibility of restoring a further level of production cuts for a total of about 1.65 million barrels per day.
The reasons for the increase and geopolitical tensions
The decision was made by the eight members of the OPEC+ “in consideration of a stable global economic outlook and the current healthy fundamental market, as a reflection of the low oil stocks, and in accordance with the decision agreed on December 5, 2024 to start a gradual and flexible return” to the production levels preceding the voluntary cut of 2.2 million barrels.
However, the production increase was announced in a context of growing tensions, due to the pressures that the president of the United States Donald Trump is exercising on India to suspend the purchases of Russian oil, in the field of efforts to force Putin to negotiate for a peace agreement with Ukraine. Agreement that the US leader wants by August 8th.
Oil remains stable starting from 70 dollars
The price of oil, despite the announcement of production increases, remained substantially stable near the 70 dollars per barrel, far from the minimums of the year touched at 58 dollars. A reaction expected for a decision that was almost obvious and already incorporated into market prices.
The Brent this morning exchanges at $ 69.72 per barrel, almost stable compared to last Friday (+0.07%), while the contract on the US light raw passes from hand to $ 67.51 a barrel, leading 0.27%.
