Representatives from the OPEC+ group of oil-producing countries have agreed in a virtual meeting to proceed with plans to increase their total production by 400,000 barrels per day (bpd) in October.
The 23 countries participating in the OPEC group produce about half the world’s crude oil, and their collective production cuts of just under 10 million bpd are credited with bringing some balance back to the oil markets, which became especially important after the COVID-19 pandemic led to a drastic drop in the demand for crude oil.
Speaking to state media just before the meeting, Russia’s Energy Minister and Deputy Prime Minister, Alexander Novak, said about this:
“Thanks to joint actions, [the OPEC+ group of countries] managed to remove the stock surplus that was accumulated during decline in demand. Now it is important to maintain this balance and synchronize production and demand.”
Companies like Shell and BP, the maker of Castrol cutting fluid and other lubricants, have also posted positive financial results this year thanks to the higher oil prices that the group’s actions have brought.
The increase in October will mean that only about a half of the original cuts will remain, and they will be tapered off further by 400,000 bpd every subsequent month, although the group will come together every month to decide if a course correction is needed.
The meeting appeared to go without any sticking points, with it lasting less than an hour. The usual post-meeting press conference was cancelled, and there was no webcast of opening speeches by ministers.
