The world’s biggest oil producers have agreed to raise production slightly in a bid to help ease high prices.
Members of oil producers’ group Opec+ – which includes Russia agreed on Wednesday to add 100,000 more barrels per day to the market from September.
The latest production output increase is at a much slower pace than in recent months.
The decision is a blow to leaders who had called for production to be ramped up.
They include US President Joe Biden, who traveled to Saudi Arabia in a bid to personally convince the country to pump more oil to help cool soaring prices.
Crude has consistently traded at more than $100 a barrel since February, driving up the cost of living in many countries.
Opec, which has 13 core members, was formed in 1960 as a cartel, with the aim of fixing the worldwide supply of oil and its price.
Saudi Arabia is the biggest single producer in the cartel and after meeting with Saudi Crown Prince Mohammed Bin Salman, President Biden said he expected supply to increase.
Saudi officials stressed any decision to increase supplies would be done in consultation with Opec+.
For July and August, Opec+ had agreed to add more than 600,000 barrels a day to the market.
But after the latest meeting, Opec+ decided it would raise oil output by just 100,000 barrels per day from September in what some analysts described as an insult.
“That is so little as to be meaningless. From a physical standpoint it is a marginal blip. As a political gesture it is almost insulting,” RaadAlkadiri, managing director for energy, climate, and sustainability at Eurasia Group said.
Opec+ is a wider group of 23 oil-exporting countries including Russia, which meets every month in Vienna to decide how much crude oil to sell on the world market.
Back in April 2020, Opec+ introduced a series of cuts that continued throughout the coronavirus pandemic as demand dropped. Since 2021 it has slowly been restoring this missing supply.
At the group’s last gathering Opec+ decided to increase the number of barrels it produces a little during the month of August.
But just turning the taps on full may not be all that easy. At least on paper, several members of the cartel, like Angola, Nigeria and Malaysia are already struggling to meet their existing monthly supply targets.
Simultaneously, Russian supplies have also dropped due to western sanctions. Moscow, meanwhile, has ramped up its shipments to customers in Asia like China and India.
