Key OPEC+ members to boost oil production next month

LONDON: Eight key members of the OPEC+ alliance said Sunday they have agreed to again boost oil production, in a strategy analysts saw as a bid to gain a bigger market share of sales of crude.

The group’s statement cited steady global economic outlook and current healthy market fundamentals.

Oil ministers in the V8 grouping — comprising Saudi Arabia, Russia, Iraq, United Arab Emirates, Kuwait, Kazakhstan, Algeria and Oman — decided to increase daily production by 137,000 barrels a day from next month, they said in a statement.

Previously, OPEC+ had increased oil production with effect from September 1 by 547,000 barrels per day.

Meanwhile, the move is clearly a sign of the ongoing global trade war as the major oil producers are ready to slash profits to secure bigger share in the global market amid an upheaval caused by the Trump tariffs.

It also corresponds to a major condition of the US-EU trade deal which requires the European nations to buy more oil and LNG (liquified natural gas) from the United States.

Read more: Trump to Europe: Stop buying Russian oil, put pressure on China

Hence, even two major US allies Saudi Arabia and the United Arab Emirates are among those increasing oil production along with Russia.

In fact, the two wealthy Gulf States have been pressing for increasing their oil production share under the OPEC quota to meet the expenditure on modernising their economies.

Read more: Economic diversification: Qatar zooms in on Africa

FULLY COMPLIANT

In his comments, Russian Deputy Prime Minister Alexander Novak later said Russia is fully compliant with its OPEC+ commitments.

The oil market is balanced, and the deal is being implemented on a very high level, Novak said, speaking on state TV after the group meeting.

“We agreed that we would monitor the market situation. We will have opportunities in the future, also meeting monthly, to make decisions in one or another direction depending on the state of the market”, he added.

Moreover, Novak said, “As far as Russia is concerned, we are fulfilling our obligations in full. Both in terms of compensation and in terms of increasing volumes that were agreed in previous periods.”