OPEC+ ministers agreed on Sunday to boost oil production from August to cool prices which have climbed to two and a half year highs as the global economy recovers from the coronavirus pandemic, Reuters reports.
The group, which includes OPEC countries and other top oil producers like Russia, last year cut production by a record 10 million barrels per day (bpd) amid a pandemic-induced downturn in demand and collapsing prices. It has gradually reinstated some supply to leave it with a reduction of about 5.8 million bpd.
From August until December 2021, the group will increase supply by a further 2 million bpd or 0.4 million bpd a month, OPEC said in a statement. It plans to entirely phase out cuts by around September 2022.
OPEC+ ministers also agreed to extend their overall agreement until the end of 2022 from an earlier planned date of April 2022, to leave more room for manoeuvre in case global recovery stalls due to new virus variants, according to the report.
During the meeting, the group also agreed on new oil production quotas for its several members from May 2022, including the UAE, Saudi Arabia, Russia, Kuwait and Iraq.
The new agreement of OPEC+ resulted in global oil prices falling sharply. During the trades in Monday morning, Brent crude was down $2.01, or 2.7%, at $71.58 a barrel. US West Texas Intermediate (WTI) was down $2.06, or 2.8%, at $69.75 a barrel.