But the talks revealed tensions in the unwieldy group, known as OPEC Plus, which has tried to manage the oil market since 2016. These tensions could make it difficult for producers to stay in line with production targets as the global economy recovers in the next few months.
Under the agreement, members of the Organization of the Petroleum Exporting Countries along with Russia and other countries will increase production by 500,000 barrels per day in January and potentially by a similar amount in the following two months. The increase, less than 1% of the world oil market, comes as demand remains under pressure from the effect of the coronavirus pandemic.
The group will also hold monthly meetings to approve further adjustments.
The deal was a compromise between countries that wanted to proceed with a much larger increase of 2 million barrels per day, which had been agreed at a previous meeting, and others, led by Saudi Arabia, who preferred to maintain current production cuts, he estimated. . to 7.7 million barrels per day, given the uncertainties arising from the pandemic.
Reaching an agreement had been surprisingly difficult. Thursday’s meeting was delayed by two days as officials struggled to reach consensus.
Recent news about the effectiveness of vaccines to protect against the coronavirus, which has caused oil prices to reach their highest levels since they plummeted in April, likely made it difficult to reach a deal. In response to those higher prices, some oil producers saw less need to keep supplies tight and wanted to increase pumping to try to make up for nearly a year of dismal oil profits.
“As prices go up, the will to restrict supplies fades,” said Bhushan Bahree, CEO of IHS Markit, a research firm.
What was surprising was that the United Arab Emirates, long Saudi Arabia’s closest ally, the de facto leader of OPEC, proved difficult to corner. Analysts say the UAE’s ambitious leaders are irritated by various problems, including a tight quota that drastically hampers their plans to substantially increase oil production and the dominance of Saudi Arabia and Russia in oil decision-making in the countries. last years.
Analysts, including Bahree, say the country, OPEC’s third-largest producer after Saudi Arabia and Iraq, may be considering going its own way on oil.
“They don’t want to be marginalized and just be followers,” said Amrita Sen, head of oil analysis at Energy Aspects, a market research firm.
Frustrated by the difficulty of forging a consensus, Prince Abdulaziz bin Salman, the Saudi oil minister and chairman of the OPEC Plus meetings, offered on Monday to step down from the chairmanship of an influential committee that paves the way for the group’s decisions.
According to an OPEC press release on Thursday, oil producers urged him to continue leading the OPEC Plus committee and meetings, saying his efforts were “highly appreciated.”
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