OPEC and its allies agreed today on an increase in its crude oil output following the Joint Ministerial Meeting, according to delegates cited by multiple media.
OPEC’s move follows US President Biden’s visit to Riyadh urging Saudi Arabia to pump more oil to relieve inflation. The cartel’s decision signals Riyadh and Washington could be on a path toward reconciliation.
The agreement could offer little respite for consumers suffering the inflationary squeeze of high oil prices. Brent crude erased earlier losses, rising 1.3% to $101.80 a barrel as of this afternoon.
OPEC has little appetite for growth
Several OPEC members have been struggling to hit their own production targets after years of under-investment. In fact, only Saudi Arabia and the UAE have managed to bolster production with just a fraction of the group’s promised increases reaching world markets, according to Bloomberg. During the meeting, there were no discussions about whether the OPEC and its allies would keep increasing production beyond September.
Before the meeting, delegates privately indicated they were hesitant to ramp up production when oil demand is constrained by the threat of recession in the US and continued lockdowns in China. Saudi Arabia ramped up output to 10.78 million barrels a day last month, according to a Bloomberg survey — a level pumped only on rare occasions that leaves limited spare capacity.
