Saudis, Russia tentatively agree on gradual increase in OPEC oil production
Through Salma El Wardany, Grant Smith, Javier Blas and Dina Khrennikova at 7/1/2021
(Bloomberg) – Saudi Arabia and Russia have reached a tentative deal to gradually increase OPEC + oil production in the coming months, delegates said.
Negotiations over the details of the bid increase are still ongoing, delegates said, asking not to be named because the information is private. The proposal under discussion would add about 2 million barrels per day to the cartel’s output from August to December, they said.
Implementation of the deal would be conditional on the status of talks between Iran and the United States, which seek to revive their nuclear pact and lift sanctions on oil exports from the Islamic Republic, delegates said. . It would also extend the expiration date of all OPEC + cuts from April to December 2022, a delegate said.
The evolving debate between the Organization of the Petroleum Exporting Countries and its allies has major implications for the oil market and the economy in general.
Crude has risen by around 50% this year, with the recovery in demand from the pandemic overtaking the resumption of OPEC + supplies after drastic cuts last year. The surge in oil, combined with a recovery in other commodities, has again raised central banks’ fears of inflation. It also shows how Saudi Arabia and Russia are back in command of the global energy market – a remarkable comeback after negative prices just over a year ago.
Oil extended its gains in New York, up 2.7% to $ 75.43 a barrel.