OPEC reaches deal on oil production increase
OPEC+ reached a deal on oil production increases Sunday, following a protracted dispute between the United Arab Emirates and Saudi Arabia.
Why it matters: The increase in oil production, which is at the center of the agreement, comes at a pivotal point as global economies prepare to open up post-pandemic.
- Earlier this month, gasoline prices spiked, reaching their highest levels in over six years after the group failed to arrive at an agreement.
- Under the agreement, the group will begin coordinated increases in production in August. Overall production will grow by 400,000 barrels per day on a monthly basis thereafter.
- The pact signals the end of a conflict between Saudi Arabia, the world's largest oil producer, and the Emirates.
- “We are here to stay,” Prince Abdulaziz bin Salman, Saudi Arabia’s oil minister, said at a news conference, according to the New York Times. “What bonds us together is way beyond what you imagine.”
What they're saying: “This latest OPEC bust-up highlights important changes in oil marketing strategy that are starting to spread across the global oil patch,” Jim Krane, a fellow at Rice University’s Baker Institute, said, per the NYT.