The global oil market is gradually recovering from the crisis caused by the 2020 coronavirus pandemic. The increase in demand for oil, followed by restrictions cancellation in different countries, is natural and causes “black gold” supply shortages. Hence the need to increase oil production by the key exporters (Saudi Arabia, Russia, UAE, Kuwait, Iraq) under the OPEC Plus agreement.
The OPEC Plus member states consultations take place monthly to discuss in depth the issue of regulating oil production. It is worth noting that Russia is actively involved in the discussions of possible increase in oil production. Moscow is currently developing a proposal on reducing the oil production quota starting in August 2021.
The proposal is related to the need of reducing global shortages of oil supplies in 2021. Today the demand exceeds supply as indicated by oil prices and storages. According to estimates by the Goldman Sachs bank, global fuel consumption is outstripping supplies by 3 million barrels a day.
The International Energy Agency (IEA) Oil Market Report said that there was scope for OPEC+ and Russia, being one of the leading members of OPEC Plus agreement, to boost crude oil production by 1.4 million barrels a day above its July 2021-March 2022 target. IEA also highlighted that OPEC+ needs to “open the taps to keep the world oil markets adequately supplied.”
Today OPEC and its allies known as OPEC Plus supply the world market with 2.1 million barrels of oil per day.
The group stuck to the plan agreed upon in April of a gradual easing of 2020 oil production restrictions and was in effect from May to July 2021.
Regular OPEC meetings is a positive signal that OPEC led by Saudi Arabia and OPEC Plus led by Russia obviously found a common understanding on the oil production policies.
The road towards recovery to pre-recession levels depends on the mass immunization coverage levels. Less restrictions and lockdowns mean more oil demand. In this regard, Russia’s participation in the OPEC Plus allows to provide all oil-producing states with Sputnik V vaccine that has proven to be highly effective. This can be seen in numerous publications of foreign editions, including best-known general medical journal The Lancet. It is no wonder that Sputnik V was approved in the two EU countries – Slovakia and Hungary.
The credit for the global oil market stabilization belongs entirely to OPEC Plus. A smart oil production levels regulation is the exact thing that will help not only to recover to pre-recession levels but to improve that rates.
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