OPEC+ bows to pressure to pump more oil, raises output by 216,000 bpd

The Organisation of Petroleum Exporting Countries and its allies known as OPEC+ have agreed to ramp up global oil supply, yielding to western pressures to pump more oil.

The decision was made at the 29th OPEC and non-OPEC ministerial meeting held on Thursday.

The group decided to add 648,000 bpd of oil to the market in July and August – up by 216,000 bpd – from 432,000 bpd in recent months. 

This comes as some OPEC members reportedly nudged the alliance to exempt Russia from its oil output targets, paving way for major oil producers like Saudi Arabia and the United Arab Emirates to pump more oil.

The meeting noted the most recent reopening from lockdowns in major global economic centers.

It further noted that global refinery intake is expected to increase after seasonal maintenance, and also highlighted the importance of stable and balanced markets for both crude oil and refined products.

OPEC+, therefore, resolved to “reconfirm the production adjustment plan and the monthly production adjustment mechanism approved at the 19th OPEC and non-OPEC ministerial meeting and the decision to adjust upward the monthly overall production by 0.432 mb/d for the month of July 2022.

“Advance the planned overall production adjustment for the month of September and redistribute equally the 0.432 mb/d production increase over the months of July and August 2022. Therefore, July production will be adjusted upward by 0.648 mb/d as per the attached schedule.”

The 13-member alliance scheduled its next meeting for June 30 to determine the oil output for August.

OPEC+ had been shunning calls by the United States for a larger oil output, even in the face of Russia’s invasion of Ukraine and western sanctions on the Kremlin.

Its decision to increase oil output is expected to deal a blow to Nigeria’s already-low oil output as the country would be allocated a higher production quota.

Nigeria has been pumping below 1.4 million barrels per day, lower than the production quota set by OPEC.

Lack of investment, divestments, operational difficulties, as well as oil theft, are some of the issues bedeviling the country’s oil sector.