The oil pact OPEC+ launched at the outset of the pandemic is finally nearing an end, and where the group goes from here is a politically fraught question.
By August 2022, the last of the huge oil-output cuts the group made in 2020 will have been rolled back and delegates from the 23 nation coalition say they are now grappling with what comes next.
As President Joe Biden prepares to visit Saudi Arabia, OPEC’s de facto leader, US officials are laying the ground for the kingdom and its neighbor, the United Arab Emirates, to move beyond their August production levels and announce further increases to help cool oil prices that are above $110 a barrel.
Right now the Persian Gulf exporter is seeking guarantees on regional security before they agree to pump at these unprecedented levels, and they are still weighing up their options.
Saudi Arabia has been walking a fine line between heeding the requests from its longtime but somewhat estranged American ally, and Russia, the joint architect of the alliance that rescued oil prices from their worst slump in history.
In a show of support for the increasingly ostracized nation, Saudi Energy Minister Prince Abdulaziz bin Salman traveled to St Petersburg International Economic Forum this week, posing for a photograph with Russia’s Deputy Prime Minister Alexander Novak and describing relations between the two capitals as “good.”
Earlier this month, Riyadh steered the group to accelerate production increases in July and August by 50 per cent.
Bjarne Schieldrop, chief commodities analyst at SEB AB, said:“OPEC has a long history of being pragmatic amid turbulent geopolitics.
“They want to have the shine of being seen as a ‘responsible’ actor.”
For more information visit www.opec.org
