By Stanley Reed
NEW YORK – The group of oil-producing nations known as OPEC+ agreed Thursday (2) to a larger increase in supply than planned for July and August.
After a videoconference, the group said it would raise production by 648,000 barrels a day, an increase of about 50% over the 430,000 barrels a day agreed under a program last year. Essentially, producers are compressing three months of planned increases into two months.
The group suggested in a news release that it was responding to a reopening from lockdowns in countries such as China. Not mentioned was pressure from Washington for an increase in supply to address rising prices.
The Saudis are trying to improve their relationship with the Biden administration, which wants to prevent soaring oil prices from alienating American voters in midterm elections and damaging the economies of the United States and other countries. But Riyadh also does not want to break its five-year alliance on oil matters with Moscow, which is a co-leader of OPEC+.
Oil prices, which had fallen before the meeting, moved higher after the OPEC+ announcement, with West Texas Intermediate crude, the US bench mark, up nearly 1%, to more than $116 a barrel.
“The United States welcomes the important decision from OPEC+ today to increase supply by more than 200,000 barrels per day in July and August based on new market conditions,” White House press secretary Karine Jean-Pierre said in a statement.
Russian production has fallen by around 1 million barrels a day, or about 10%, since the invasion of Ukraine because of Western sanctions and wariness by some buyers of handling Russian oil. Further decreases in Russian output are expected as recent measures by the European Union to stop most Russian oil purchases take effect.
-New York Times