OPEC and participating non-OPEC oil producing countries including Russia (OPEC+) agreed during the 29thMinisterial Meeting June 2 to raise production by 648,000 b/d in July and August, which is expected to moderately mitigate soaring energy prices and the resulting inflation.
The OPEC+ group has been steadily adding 432,000 b/d per month to gradually resume production cuts from 2020. During Thursday’s meeting, OPEC+ decided to advance the planned overall production adjustment for the month of September and redistribute equally the 432,000 b/d production increase over the months of July and August 2022. Therefore, July production will be adjusted upward by 648,000 b/d.
The move comes as Russian oil production is expected to plummet in response to sanctions targeting the country's energy exports, especially given the recent decision by the European Union (EU) to stop most Russian oil purchases by yearend (OGJ Online, May 31, 2022). OPEC+ also noted the most recent reopening from lockdowns in major global economic centers like China, and further noted the expected global refinery intake increase after seasonal maintenance.
“We welcome the important decision from OPEC+ today to increase supply in July and August based on new market conditions. This announcement brings forward the monthly production increase that was previously planned to take place in September,” White House Press Secretary, Karine Jean-Pierre, said in a statement.
The meeting also extended the compensation period until end December 2022 as requested by some underperforming countries. Underperforming countries were asked to submit compensation plans in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting by June 17, 2022.
The 30th OPEC and non-OPEC Ministerial Meeting will be held June 30, 2022.