- After a week of intense negotiations, all 23 members of the alliance agreed on a phased deal that would put 500,000 barrels back on the market from next month
- After weeks of uncertainty, oil markets reacted positively to the new deal, with Brent nearing $50 a barrel – its highest level since March
DUBAI: Last week’s meeting of OPEC+ was the most important since the event in April which repaired divisions within the oil producers’ alliance and set the stage for recovery in global crude markets.
Under the terms of the spring agreement, OPEC+ was due to put an extra 2 million barrels per day back onto global markets from next month.
But there was disagreement within the ranks as to the effect such a surge in supply would have in a still-fragile world economy, where energy demand continuing to feel the effects of the pandemic.
Saudi Arabia, the biggest exporter in OPEC+, wanted to wait and see how the global economy performed in the first part of the year, especially in light of the vaccines now becoming available.
Russia, whose relationship with the Kingdom has been the stabilizing influence in OPEC+, was also wary of global economic conditions, but its private oil companies were keen to earn precious revenue from increased oil supply.
The UAE, traditionally a stalwart ally of Saudi Arabia in OPEC matters but with its own energy strategy increasingly coming to the fore, let it be known that it was not enthusiastic on a plan that postponed supply increases for any great length of time.
After a week of intense negotiations, all 23 members of the alliance agreed on a phased deal that would put 500,000 barrels back on the market from next month, with similar increments following on a monthly basis, subject to regular meetings of the OPEC+ ministerial committee – under the chairmanship of Saudi energy minister Prince Abdulaziz Bin Salman – that monitors the minutiae of global oil markets.