As the media reported, the 8 key OPEC+ members eventually agreed on a larger-than-expected increase in production — by about 550,000 barrels per day.
Points of attention
- Saudi Arabia is particularly keen on restoring idle capacity swiftly, and OPEC+ aims to reach a production level of 2.2 million barrels per day by September.
- This decision has long-term implications on the global oil market dynamics and may impact various stakeholders including consumers and competitors.
Oil prices will soon fall
Analysts point out that this OPEC+ decision is based on a change in strategy.
Its key goal is to accelerate production, which could lower the price of “black gold.”
The accelerated increase in production comes amid growing regional supplies and uncertainty about demand as President Trump's trade war threatens to destabilize the global economy.
According to individual OPEC+ members, they are accelerating the recovery of production in part to take advantage of higher demand during the northern hemisphere summer.
Another important task is to punish group members who exceed production volumes and restore sales volumes given to competitors, such as American shale oil producers.
OPEC+ representatives claim that Saudi Arabia is particularly interested in restoring idle capacity as soon as possible.
A larger increase in August would allow OPEC+ to return to producing 2.2 million barrels per day by September.
