© Reuters. FILE PHOTO: A 3D-printed oil pump crack is seen for the OPEC logo displayed in this image image, April 14, 2020. REUTERS / Dado Ruvic / Illustration / File Photo
By Rania El Gamal, Olesya Astakhova and Ahmad Ghaddar
MOSCOW / DUBAI / LONDON (Reuters) -OPEC + ministers agreed on Sunday to boost August oil supplies to cool prices that climbed to 2-1 / 2-year highs as the global economy recovers from the coronavirus pandemic.
The group, which includes OPEC countries and allies such as Russia, decided with effect from May 2022 on new production allocations after Saudi Arabia and others agreed to a request from the United Arab Emirates (UAE) threatening the plan .
“We are pleased with the deal,” UAE Energy Minister Suhail bin Mohammed al-Mazroui told a news conference. Saudi Energy Minister Prince Abdulaziz bin Salman declined to answer questions about how the compromise was reached.
OPEC + reduced production last year by a record 10 million barrels per day (bpd) amid a pandemic-driven slump in falling prices and falling prices. It has gradually restored some supply to leave it with a reduction of about 5.8 million bpd.
From August to December 2021, the group will increase supply by a further 2 million bpd than 0.4 million bpd per month, OPEC said in a statement.[O/R] It intends to fully phase out cuts by September 2022.
The group had agreed to extend its general pact until the end of 2022 from an earlier planned date of April 2022, to leave more room for maneuver in case global recovery is hampered by new virus variants.
While both Riyadh and the UAE were in favor of a direct impetus, the UAE had objected to the Saudi idea of extending the pact to December 2022 without obtaining a higher production quota.
To overcome the disagreement, OPEC + agreed on new export quotas for several members by May 2022, including the UAE, Saudi Arabia, Russia, Kuwait and Iraq.
The UAE will see its base production, from which cuts are calculated, increase to 3.5 million bpd from May 2022 from today’s 3,168 million.
Saudi Arabia and Russia will see their baselines rise to 11.5 million bpd each from the current 11 million. Iraq and Kuwait will see their baselines rise by 150,000 bpd each.
Prince Abdulaziz said Nigeria and Algeria could also see their baselines changed.
He said OPEC + would adjust its policy if and when Iranian oil returned to the market once the country reached an agreement with world powers on its nuclear program.
It is estimated that Iran could add about 1.5 million bpd to global supply once the agreement is reached and Western sanctions are lifted.
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