At a meeting on June 1, the group of Petroleum Exporting Countries (OPEC) and its partners, also known as OPEC+, agreed to maintain the agreed output increase until next July.
The OPEC+ post-meeting statement “reaffirms the present commitment” and said the rate of production will be “determined according to market conditions”.
The decision came after oil-producing countries balanced forecasts for the possibility of demand recovery in the face of increased Iranian oil supplies following progress in nuclear negotiations.
OPEC Director General Mohammad Barkindo said that increased supply from Iran would not pose a big problem.
Meanwhile, Saudi Energy Minister Abdulaziz bin Salman forecast that oil demand is recovering well in the US and China. According to him, the COVID-19 vaccination campaign is “gaining momentum” with about 1.8 billion doses of the vaccine already administered around the world, and that will only lead to a further rebalancing of the oil market. .
Last April, OPEC + agreed to return to 2.1 million barrels per day of production in the period from May to July because of the forecast of increased demand despite the COVID-19 epidemic raging in India. Since that decision, oil prices have risen and regained more than 30% of last year’s levels. Brent oil price on June 1 reached $71 per barrel, the highest level since March.
OPEC+ experts forecast oil demand in 2021 at 6 million barrels per day, in the context of the world recovering from the COVID-19 epidemic.