The oil expert, Muhammad Al-Shatti, said that the OPEC Plus agreement came as a surprise to the market after an increase of 648,000 barrels per day during the months of July and August, while expectations were likely to increase by 432,000 barrels per day.
Al-Shatti added, in an interview with “Al-Arabiya”, that the increase in production will have Side repercussions for market stability.
He stated that with the assumption that some countries – such as Russia, which is facing sanctions – cannot meet their share, they have succeeded in directing many of their sales to Asia, specifically to China and India.
And Al-Shatti indicated that, during the Corona pandemic, OPEC has proven that it is able to meet the needs of the market and identify them well, so that OPEC responds to the high demand in the market by pumping more production.
He explained that there are options for OPEC, and according to market data, the move will be.
Al-Shatti stressed that Russia is a strategic ally of OPEC, adding that abandoning Russia is not on the table.
On Thursday, OPEC+ agreed to increase production by 648,000 barrels per day for July and August, which is about 50% more than increases in recent months. This means that the group will add approximately 400,000 barrels per day of crude oil during these two months, in addition to the increases already agreed upon. However, doubts remain that some coalition countries will fully honor the pledged increases.
Citigroup said in a note that the OPEC+ decision could mean, in practical terms, 132,000 barrels per day of actual additional production from Saudi Arabia, the UAE, Kuwait and Iraq.
She added that prices rose in the past week as the European Union agreed to a Russian oil embargo, Chinese lockdowns were lifted, and the summer driving season began in the United States.
Oil has risen this year due to a rebound in demand as countries lift coronavirus restrictions, while Russia’s invasion of Ukraine has reduced supply from one of the world’s three largest producers, and a possible resurgence in consumption in China, the number one importer of crude oil, now threatens to add more pressure. upward on prices.