Saudi Arabia’s Minister of Energy, Industry and Mineral Resources Khalid Al Falih has said the oil production agreement reached over the weekend in Vienna at the 174th meeting of the Organisation of the Petroleum Exporting Countries (OPEC) will see around 1mn extra barrels per day (bpd) added to the global market, according to multiple sources.
Al Falih also predicted that the kingdom itself would most likely spike its production by several hundred thousand bpd as part of the arrangement. Saudi Arabia has been at the forefront, alongside leading producer Russia, of a group of 24 OPEC and non-OPEC nations underpinning a daily cutback of 1.8mn bpd since the start of 2017 in a bid to reduce global oil inventories and to support the price of Brent crude in the face of ever rising US production – which has been spurred by its tight oil industry.
The deal will effectively see the current cutbacks reined in to 100% adherence as opposed to levels in excess of 150% as was achieved in May. Analysts see the deal as a compromise between Saudi Arabia which sought a production increase and the likes of Iran and Venezuela which did not.
As a backdrop to the talks, US President Donald Trump had pressured OPEC via social media to “increase output substantially”. US gasoline prices have soared as oil has risen in 2018 and Trump is facing increasing criticism domestically as the November midterm elections loom.