8 OPEC+ countries plan to increase oil production

According to RIA Novosti, Bloomberg reported that eight OPEC+ countries, including Russia, Saudi Arabia, Oman, Kazakhstan, Iraq, the United Arab Emirates (UAE) and Kuwait, plan to approve an increase in maximum oil production in September by 548,000 barrels per day at a meeting on August 3.

“Saudi Arabia and its partners plan to approve a production increase of 548,000 barrels per day next month in a virtual meeting on August 3,” Bloomberg said.

This increase in maximum production would allow OPEC+ to exit voluntary restrictions of 2.2 million barrels per day, as well as take into account the UAE's quota, which has been gradually increasing by 300,000 barrels per day since April.

Eight of the 19 OPEC+ countries, in addition to their quotas, can voluntarily cut production by 1.65 million barrels per day, effective until the end of 2026. There are also restrictions introduced a little later - another 2.2 million barrels. According to the plan, the increase in production will take 1.5 years. During the same period, the UAE was supposed to increase its basic quota by 300,000 barrels.

However, in early April, eight OPEC+ “volunteers” decided to accelerate the exit from May restrictions and increase oil production in May by 411,000 barrels per day at the same time. A similar decision was made in June and July. And in August, these countries decided to increase the allowed production level by 548,000 barrels per day at the same time.

However, these countries must also comply with the compensation schedule previously provided to the OPEC Secretariat. At its expense, they compensate for the excess of previously allowed production limits. Taking into account this schedule, in August the maximum allowed production increased by only 502,000 barrels/day.

Oil production levels for September will be discussed by OPEC+ on August 3. Countries that produce more than their quotas must also submit updated schedules to compensate for excess production by August 18.

The world has nothing to replace the volume of oil supplied by Russia, said Alexei Pushkov, a member of the Constitutional Committee of the Russian Federation Council. Russia accounts for about 10% of the world's supply,

"Indian refineries continue to buy Russian oil, despite Trump's warnings about imposing large tariffs in the form of secondary sanctions. In India, this is explained, in particular, by the fact that in case of stopping the supply of 9.5 million barrels per day to the world market from Russia, oil prices could rise to $ 135-140 per barrel. And in general, nothing can replace such volumes: Russia accounts for about 10% of the world's oil supply," Pushkov said.