Jul 18, 2021 - Politics & Policy

OPEC reaches deal on oil production increase

Oil field in Saudi Arabia
An Oil field in Khurais, Saudi Arabia. Photo: Maya Siddiqui/Bloomberg via Getty Images

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.

Go deeper: Why rising oil prices matter — and what comes next

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