The Organisation of Petroleum Exporting Countries and its allies known as OPEC+ have agreed to increase production by 400,000 barrels per day.
The group made the decision at the 19th OPEC and non-OPEC ministerial meeting on Sunday.
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Last month, OPEC+ agreed to continue to boost output in July, in line with the group’s April decision to return 2.1 million barrels per day to the market between May and July.
But the last meeting, which was supposed to seal the agreement, was called off after the United Arab Emirates (UAE) criticised a proposed eight-month extension to output restraints.
In a statement issued by OPEC at the end of the meeting, the new adjustment will take effect from August until December 2021.
“In view of current oil market fundamentals and the consensus on its outlook, the Meeting resolved to reaffirm the Framework of the Declaration of Cooperation, signed on 10 December 2016 and further endorsed in subsequent meetings, including on 12 April 2020,” the statement reads.
“Extend the decision of the 10th OPEC and non-OPEC Ministerial Meeting (April 2020) until the 31st of December 2022.
“Adjust upward their overall production by 0.4 mb/d on a monthly basis starting August 2021 until phasing out the 5.8 mb/d production adjustment, and in December 2021 assess market developments and participating countries’ performance.
“Continue to adhere to the mechanism to hold monthly OPEC and non-OPEC ministerial meetings for the entire duration of the Declaration of Cooperation, to assess market conditions and decide on production level adjustments for the following month, endeavouring to end production adjustments by the end of September 2022, subject to market conditions.”
The group said it agreed to new production allocations from May 2022 after Saudi Arabia and others agreed to a United Arab Emirates (UAE) request that had threatened the plan.
“Adjust, effective 1st of May 2022, the baseline for the calculations of the production adjustments according to the attached table.
“Reiterate the critical importance of adhering to full conformity and taking advantage of the extension of the compensation period until the end of September 2021. Compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.”
The statement added that the group also decided to hold the 20th OPEC and non-OPEC ministerial meeting on September 1, 2021.
On Friday, Brent crude climbed to $73.59 a barrel while U.S. West Texas Intermediate (WTI) crude futures traded $71.81 at the end of the trading day.