Oil is gradually regaining its position after a slight decline. Following the successful negotiations of cartel members, oil prices settled at around $70 per barrel.
OPEC and its allies managed to bridge divisions on crude production cut agreement. They convinced the main opponent of the deal – the United Arab Emirates – that the agreement should be extended. However, there were serious risks of wrecking it. The OPEC ministers had failed to settle main arguments a few weeks before the meeting. As a result, the parties concluded crude production cuts were essential. However, Russia was content with $50 – $60 per barrel, while Saudi Arabia was interested in the range between $70 and $80. Therefore, the decision was accepted as a compromise.
The extension will be in force until the end of 2022 with several amendments. They allow Saudi Arabia and Russia to increase their oil production up to 11.5 mln by 0.5 mln barrels per day. The UAE limit was raised to 3.5 mln from 3.17 mln barrels per day. Besides, the crude baseline production was raised for Kuwait and Iraq by 150,000 barrels per day. All countries agreed to raise oil production by 0.4 mln barrels per day monthly. In this way, the production will be hiked to 3.7 mln barrels per day by the end of 2021.
