OPEC+ to Ramp Up its BPD Oil Production in Summer 2022

The Organisation of the Petroleum Exporting Countries (OPEC) and its partners, including Russia, have agreed to increase output by 648,000 Barrels Per Day (BPD) in July and 650,000 bpd in August. This was revealed at the 29th OPEC and non-OPEC Ministerial Meeting, held by videoconference on June 2, as the cartel seeks to compensate for dropping output by its important member Russia despite expectations of robust fuel demand this summer. It goes on to say that after the seasonal maintenance, worldwide refinery intake would likely grab a speed. Both crude oil and refined product markets ought to be stable and balanced, according to the meetings. 

The recent reopening of major global economic hubs, particularly China, was discussed at the gathering. The alliance's ministers agreed to enhance monthly output rises by 432,000 bpd in another super-short meeting, accepting the advice of the Joint Ministerial Monitoring Committee, which convened earlier in the day. They've effectively decided to "advance the scheduled overall production adjustment for September and allocate the 0.432 mb/d output increase equally over the months of July and August 2022." As a result, as per the attached schedule, July production will be increased by 0.648 mb/d. 

The members agreed to extend the compensation term to the end of December 2022, as requested by some failing nations, and require them to submit proposals by June 17, 2022. Compensation plans should be prepared in compliance with the 15th OPEC and non-OPEC Ministerial Meeting's declaration. They emphasize the need for full compliance and the compensation method.

Russia, on the other hand, is dealing with shut-in wells and production declines as a result of Western sanctions imposed in response to the Russia-Ukraine war. Russian production was projected to be roughly 1 million bpd below its OPEC+ quota as of April.

Only Saudi Arabia, the United Arab Emirates (UAE), and, to a lesser extent, Iraq is thought to have the excess capacity within OPEC+. Even with the 400,000-bpd monthly output rise for OPEC+, nearly all other members of the alliance have struggled to achieve their requirements. With 650,000 bpd, the Saudis and the UAE will have to compensate for the rest of the world.