Opec+ agrees larger 648,000 b/d July-August quota hikes

Opec+ agrees larger 648,000 b/d July-August quota hikes

London, 2 June (Argus) — Opec+ ministers today agreed to raise their overall production ceiling by 648,000 b/d in each of July and August, four Opec+ delegates said, effectively unwinding what is left of the coalition's production cuts one month earlier than initially planned amid Russian supply concerns.

A roadmap sketched out last July had scheduled more modest increases of 432,000 b/d for July, August and September. But with these larger increases, the coalition is now set to bring back by the end of August the nearly 10mn b/d of crude production that it took off the market in April 2020 in response to the Covid-19-induced collapse in world oil demand.

Opec+ ministers also agreed that countries which have to date produced above their monthly quotas now have until December to compensate for this overproduction, one delegate said. Another highlighted that although the cuts will be unwound early, the current cooperation agreement between Opec and its non-Opec partners will still remain in place until the end of the year, leaving room for Opec+ to continue monitoring market conditions and enact new output policy for the remaining four months of the year, if supply-demand fundamentals warrant it.

The Opec+ coalition will hold its next