OPEC+ producers have agreed to boost crude oil production by 400,000 bpd each month from August to December 2021 and aim to fully lift their coordinated supply curtailment around September 2022, later than the initially planned date of April 2022. The group was close to that deal earlier this month, but the proposal broke down due to the UAE’s rebuff. The country refused to back the extension without a higher baseline production.
At the time, OPEC’s de facto leader Saudi Arabia objected to higher production because it could potentially undermine OPEC+ efforts to rebalance the market. To overcome the differences, OPEC+ agreed to increase production baselines for some members. The UAE will see its baseline production increase from 3.168 million today to 3.5 million bpd in May 2022. Saudi Arabia and Russia’s baselines will rise from 11 million bpd currently to 11.5 million bpd each. Kuwait and Iraq will see their baselines increase by 150,000 bpd each.
Saudi energy minister Prince Abdulaziz bin Salman noted that Nigeria and Algeria could also see their baselines revised. The minister added that OPEC+ would adjust its production policy if economic sanctions on Iran were lifted, allowing it to revive its oil exports. Iran is currently exempt from the OPEC+ supply deal. Analysts estimate the country could boost exports by 1.5 million bpd once the sanctions were removed.
