The Organization of the Petroleum Exporting Countries together with Russia and other oil producers have announced their decision. OPEC continues its campaign of gradual monthly output increases in February, but with some changes.
OPEC’s Tuesday decision was conveyed in a terse news release. Taking into account a persistent failure to step up production by the amounts agreed on in July, the organization intended to keep oil prices relatively high even amid the pandemic.
In November, the United States coordinated a planned release of strategic oil reserves with other nations in an effort to dampen the market, but prices have since edged up to more than $79 a barrel for Brent crude, the international benchmark, and $76 a barrel for West Texas Intermediate, the US standard.
A few producers, including Saudi Arabia and Iraq, are increasing output handily, but others in the 23-member group are lagging. A range of issues, including political strife and underinvestment in drilling, are holding them back.
Even Russia, the group’s second-largest exporter after Saudi Arabia, appears to have hit a wall at about 9.9 million barrels a day, about 600,000 less than it pumped in April 2020 before the big cuts.
Nigeria in November pumped 360,000 barrels a day below its quota — almost enough on its own to wipe out the agreed 400,000-barrel-a-day monthly increase for the overall group.
“A poor regulatory framework, sabotage and vandalisation of oil facilities” are deterring needed spending in Nigeria, the International Energy Agency said in its report.
Angola, another African country, is also pumping well under its quota, while Libyan production has recently fallen off rapidly because of political turmoil.