The Organization of the Petroleum Exporting Countries and allied producers have agreed to gradually increase their output over the next three months. The move follows a sharp increase in oil prices, and a call from the United States to keep energy affordable.
OPEC+ alliance of crude producers has been holding back roughly 8 million barrels per day from global markets. That includes an extra production cut of 1 million barrels per day from Saudi Arabia that comes on top of its commitment to other producers, CNN reported.
It said the group will increase its output by 350,000 barrels per day next month, another 350,000 barrels per day in June and roughly 440,000 barrels per day in July, according to an OPEC source. Saudi Arabia will gradually ease its additional voluntary cuts and eliminate them altogether by the end of July.
The move to increase production is a bet that vaccine rollouts will accelerate this summer across major economies and more people will begin to travel, increasing demand for energy. It also marks a more aggressive turn in strategy for the group, which had deployed a cautious approach in recent months amid worries that the global recovery may stall.
A 70% spike in the price of Brent crude, the global benchmark, over the past five months, have made producers more confident that supply cuts have put the market on a solid footing following the pandemic crash.
