OPEC+ to stick to oil supply boost plan as Biden heads to Saudi Arabia, sources say
OPEC and allied producing countries including Russia will likely stick to a plan for accelerated oil output increases in August, sources said, hoping to ease surging oil prices and inflation pressure as U.S. President Joe Biden plans to visit Saudi Arabia and the Middle East.
At its last meeting on June 2, the group known as OPEC+ agreed to boost output by 648,000 barrels per day (bpd) in July — or 0.7% of global demand — and by the same amount in August, up from the initial plan to add 432,000 bpd a month over three months until September.
The move followed months of pressure from the West to address global energy shortages worsened by Western sanctions on Russia over its invasion of Ukraine, and was welcomed by Washington.
OPEC+ holds its next meeting on June 30, when it will most likely focus on August output policies.
“OPEC+ is not going to change the plans at this month’s meeting,” an OPEC+ source said. Four other sources made similar remarks.
In July, Biden will make his first visit to Riyadh after two years of strained relations because of disagreements over human rights, the war in Yemen and U.S. weapons supplies to the kingdom.
This year, oil came close to an all-time peak of $147 hit in 2008, although it has since eased to $111 on concern about the risk of recession and how fuel demand will be affected by rising interest rates.
OPEC+ agreed to cut output by a record amount in 2020 when the pandemic hammered demand. By September, when the deal expires, the group will have limited spare capacity to lift output further.
The group has struggled to hit the monthly increase targets due to underinvestment in oilfields by some OPEC members and, more recently, losses in Russian output.