OPEC+ group agrees to limit oil output by 100,000 barrels per day in Sept amid price surge

Amid high oil prices and uncertain energy supplies due to the ongoing war in Ukraine, the Organization of the Petroleum Exporting Countries (OPEC) oil cartel and its partners agreed to boost production in September at a far slower rate than in previous months. Founded in 1960, the OPEC is an intergovernmental organization of 13 countries. On Wednesday, the OPEC+coalition stated that it will limit the output to 100,000 barrels per day in the month of September. This comes after the organisation had raised the output by 648,000 barrels per day in July and August, the Associated Press (AP) reported. 

As oil prices and demand fell during the COVID-19 pandemic, OPEC, led by Saudi Arabia, reduced output and these reductions are set to end in September. As economies began to grow again, the OPEC+ alliance gradually increased the supply of oil and gas on the market. Some members of OPEC, including Angola and Nigeria, have been producing less oil than agreed upon. However, it's uncertain if Saudi Arabia and the United Arab Emirates (UAE) will desire to expand output despite having the ability to do so.

US President Biden expects OPEC to boost production

Meanwhile, Russia's exports of oil and natural gas have decreased significantly after several Western countries imposed sanctions on Moscow for invading Kyiv. Additionally, Russia has also limited or stopped supplying natural gas to a dozen European nations, pushing up energy costs and reducing people's purchasing power. It was OPEC's first meeting since US President Joe Biden visited Saudi Arabia in July in an effort to strengthen ties and persuade the group to increase oil production. However, no agreement on oil output was made public after the meeting, but Biden anticipated OPEC to boost production in the coming days. 

Russia calls for bolstering cooperation with OPEC+ group

It is worth mentioning here that oil prices have skyrocketed across the globe after Russia launched a full-fledged war in Ukraine on February 24. Meanwhile, on July 21, Russian President Vladimir Putin held a telephonic conversation with Saudi Crown Prince Mohammed bin Salman and discussed oil cooperation. During the telephonic conversation, Russia's leader emphasised strengthening cooperation with the OPEC+ group of oil producers in face of the global energy crisis and rising oil prices.

(With inputs from AP)

Image: AP