Opec+ reaches deal to raise oil production

Opec+ reaches deal to raise oil production

Opec and its allies have reached an agreement to raise oil production at a time of soaring prices, after compromising over how the output targets of some of its largest members are calculated.

Members of the Opec+ group including the UAE, Saudi Arabia, Russia, Iraq and Kuwait will all be awarded higher production baselines "” the level from which output deals are calculated "” in a victory for Abu Dhabi that had threatened to scupper a deal early this month.

The result of the long-delayed meeting should mean higher oil production from members in the months ahead, as oil prices have soared to the highest level in three years, threatening to drag on the economic recovery during the bounce back from the Covid-19 pandemic.

Initially Opec+ will pump an extra 400,000 barrels a day each month from August, ramping up output by around 2m barrels a day in total by year end. Those monthly production increases will continue next year, with Opec+ saying it has extended the deal until December 2022 from April 2022.

"The meeting noted the ongoing strengthening of market fundamentals, with oil demand showing clear signs of improvement," Opec+ said in a statement.

Under the agreement, the UAE's production baseline, which it