OPEC+ meets to agree oil supply boost as prices rise By Reuters

© Reuters. FILE PHOTO: A 3D printed oil pump jack is seen in front of displayed OPEC logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration/File Photo

MOSCOW/DUBAI/LONDON (Reuters) – OPEC+ ministers will meet on Sunday in another attempt to agree a quick oil supply boost to address soaring oil prices as the global economy recovers from the coronavirus pandemic.

The group, which includes OPEC countries and allies like Russia, had earlier this month failed to resolve disagreement over a new output policy between Saudi Arabia and the United Arab Emirates (UAE).

OPEC+ last year agreed record output cuts of almost 10 million barrels per day (bpd) to cope with a pandemic-induced slump in demand, curbs which have been gradually relaxed since then to leave cuts at about 5.8 million bpd.

The group had planned to ease the reduction by a further 2 million bpd from August because oil prices have climbed to 2-1/2 year highs [O/R].

Whilst both Riyadh and the UAE were supportive of an immediate output boost, the UAE objected to the Saudi idea to extent the overall supply management pact to December 2022 from the current plan to end it in April 2022.

The UAE argued that it wants a higher output quota if the pact was to be extended.

A higher output quota for the UAE and potentially for other members like Iraq and Kuwait will be on the agenda on Sunday, according to three OPEC+ sources.

The producers need to decide when those higher output quotas, known as baselines, would be set in place. Sources have told Reuters the UAE might see its baseline being raised to 3.65 million bpd from April 2022 from the current 3.168 million.

It is also unclear from which month OPEC+ would release more oil into the market – August might be difficult as Saudi Arabia had already set official selling prices for its oil and releasing extra barrels might upset existing customers.

Sunday’s meeting will be held virtually and will start at 1000 GMT, OPEC said.

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