Saudi Arabia and other OPEC+ members agreed to accelerate oil production increases to offset Russian output losses, easing surging oil prices and inflation and paving the way for US President Joe Biden’s historic visit to Riyadh.
OPEC+ said it had agreed to increase output by 648,000 barrels per day (bpd) in July, or 0.7 percent of global demand, and by a similar amount in August, compared to the initial plan to increase output by 432,000 bpd per month over three months until September.
The move will be seen as a sign of willingness by Saudi Arabia and other OPEC Gulf nations to pump more after months of pressure from the West to address global energy shortages worsened by Western sanctions on Russia.
Oil rose on the news towards $117 a barrel as analysts said the real production boost will be insignificant as most OPEC members except for Saudi Arabia and the United Arab Emirates are already pumping at capacity. Earlier this year, oil came close to an all-time peak of $147 hit in 2008.
Russia is a member of OPEC+, an alliance of the Organization of Petroleum Exporting Countries and other producing nations, and its output has dropped by about 1 million bpd as a result of Western sanctions imposed on Moscow for its invasion of Ukraine.
US diplomats have been working for weeks to plan Biden’s first visit to Riyadh following two years of strained relations due to disagreements over human rights, the Yemen war, and US weapons supplies to the kingdom.
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