Opec+ reach deal to ramp up oil production
The alliance of oil producing countries have reached an agreement to ramp up oil supply.
Opec+ will increase oil production by 400,000 barrels a day in a move expected to dampen soaring oil prices.
As part of the deal, the group will reverse an existing cut of 5.8m barrels per day by September next year.
Read more: Opec+ end deadlock over oil supply policy, says source
The deal comes after weeks of stalled talks among the alliance, prompted by the United Arab Emirates rejecting an earlier proposal.
The UAE refused to extend the group’s overall supply pact until December of next year without an increase to its baseline production quota, the threshold at which each country’s output is calculated.
“We are happy with the deal,” Suhail bin Mohammed al-Mazroui, the UAE’s energy minister, told a news conference yesterday.
Details of the latest agreement have not been released.
Sources told Reuters on Friday a deal had been reached after Riyadh agreed to raise the UAE’s baseline to 3.65 million barrels per day from April 2022, the date when the current pact had been scheduled to end.
The deal is expected to ease recent surges in oil prices. Prices plummeted last year as demand for fuel fell sharply due to restrictions on economic activity. However, prices have rebounded as economies across the world reopen.
Recent price rises have been driven by sharp mismatches between supply and demand in the market. The International Energy said last week oil markets are likely to tighten further if Opec+ failed to reach an agreement.
Latest data from the ONS shows inflation is running at 2.5 per cent in the UK, higher than the Bank of England’s target.
Read more: Oil prices slide further as traders brace for supply increase