Oil-producing nations agreed on Thursday to collectively raise their production of the commodity by 432,000 barrels per day for June, sticking to an existing strategy of gradually unwinding record supply cuts.
The decision was made in the wake of "continuing oil market fundamentals and the consensus on the outlook pointed to a balanced market," along with the continuing effects of geopolitical factors and issues related to the ongoing pandemic, a statement read after virtual talks held between OPEC and non-OPEC oil ministers.
OPEC+ will hold its next meeting on June 2. The group on Thursday agreed to rubber-stamp another small production increase for June, amid persistent concerns over weaker Chinese demand and shortly after the world’s largest trading bloc outlined proposals for new sanctions against Russian crude.
The influential energy alliance of OPEC and non-OPEC partners decided to raise production targets by 432,000 barrels per day for next month, sticking to an existing strategy of gradually unwinding record supply cuts.
Led by Saudi Arabia, the group swiftly agreed in late March to raise its output targets for May.
The group’s latest meeting comes amid an unfolding supply crisis. The European Union on Wednesday announced plans to ban Russian oil imports within six months and refined products by the end of the year in its latest round of economic sanctions.
The bloc’s proposed measures reflect the widespread anger at Russian President Vladimir Putin’s unprovoked onslaught in Ukraine.
To be sure, Russia is the world’s third-largest oil producer, behind the US and Saudi Arabia, and the world’s largest exporter of crude to global markets. It is also a major producer and exporter of natural gas.
The EU has proposed a ban on Russian oil as it presents a sixth package of sanctions against the Kremlin. Oil prices jumped on the news Wednesday, adding to gains made since the Kremlin launched its invasion on Feb. 24.
The price of OPEC basket of 13 crudes stood at $110.83 a barrel on Wednesday, compared with $109.80 the previous day, according to OPEC Secretariat calculations.