By Ahmad Ghaddar, Alex Lawler and Yousef Saba LONDON (Reuters) -The OPEC+ group of oil-producing countries has begun unwinding some of its output curbs with eight members looking to gradually add back some 2.2. million barrels per day (bpd) of supply. The eight agreed to increase production in July by 411,000 bpd in an online […]
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Explainer-How are OPEC+ oil producers unwinding their output cuts?
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By Ahmad Ghaddar, Alex Lawler and Yousef Saba
LONDON (Reuters) -The OPEC+ group of oil-producing countries has begun unwinding some of its output curbs with eight members looking to gradually add back some 2.2. million barrels per day (bpd) of supply.
The eight agreed to increase production in July by 411,000 bpd in an online meeting on Saturday.
Below are details on the latest decisions from OPEC+, which includes members of the Organization of the Petroleum Exporting Countries and allies such as Russia.
WHO ARE THE EIGHT?
Algeria, Iraq, Kazakhstan, Kuwait, Oman, Russia, Saudi Arabia and the United Arab Emirates.
WHEN DID MONTHLY INCREASE BEGIN?Their increases began in April and so far they have raised their output targets through July by nearly 1.4 million bpd, or some 1.4% of daily world demand. That leaves them with about 800,000 bpd in planned increases left to enact.
WHAT ABOUT THE WIDER GROUP?An online meeting of all 22 OPEC+ members was held on May 28 with no changes to group-wide curbs.
CURRENT OPEC+ CUTS
OPEC+ collectively is cutting output by a total of 5.3 million bpd or about 5% of global demand.
This includes three tranches:
1. Two million bpd by all OPEC+ members which is currently expected to run until the end of 2026.
2. 1.65 million bpd of voluntary cuts by the eight members which is currently expected to run until the end of 2026.
3. 2.2 million bpd of voluntary cuts by the eight members which they are now unwinding.
TIMELINE
December: Since December the group of eight has made a series of decisions to accelerate the release of barrels back to the market previously scheduled to run until end of September 2026. In December United Arab Emirates was also granted a higher production quota which will see it boost output by 300,000 bpd by September 2026.
March 3: They agree to proceed with a hike of 138,000 bpd in April
April 3: They surprise the market by accelerating the schedule with an increase for May of 411,000 bpd versus a planned 135,000 bpd.
May 3: They announce a 411,000 bpd increase for June
May 31: They agree another 411,000 bpd increase for July, bringing the total to 1.37 million bpd so far and leaving about 830,000 bpd to unwind. Reuters has reported that the eight has considering unwinding the remainder by the end of October.
(Editing by Barbara Lewis and Jason Neely)