The Organisation of Petroleum Exporting Countries and its allies said Thursday it plans to increase oil production by 648,000 barrels per day in July and August, which could lead to a deal with the United States that could lower crude prices.
The organization made the announcement in a statement at the 29th OPEC and non-OPEC ministerial meeting.
Oil prices, and in turn gasoline prices, have risen to record levels since Russia’s invasion of Ukraine, which started in late February this year.
Russian, according to statistics has lost ten per cent of its production since the start of the Ukrainian invasion because of sanctions and could be hit harder if the European Union follows through with its threat to end its purchases because of the war.
Economic sanctions in the United States and other countries could take much of Russia’s oil off the market, creating an opportunity for major producers like Saudi Arabia.
Saudi-led OPEC had rejected a push from the United States and its allies to increase oil production. The Biden administration, though, sent a delegation to Saudi Arabia last month in hopes of ironing out a deal.
OPEC had repeatedly avoided addressing the Ukrainian invasion with Russia, a key OPEC ally, suggesting it has nothing to do with the market issues.
Saudi Arabia and the United Arab Emirates have significant volumes of spare capacity that could be ramped up quickly, while others have regularly missed their output forecast.