OPEC+

Context: OPEC+ approves slight crude output increases.

• OPEC called at the same time for caution on the part of those active in the sector owing to the coronavirus pandemic
• Members of the oil cartel OPEC and their partners agreed to raise output slightly in February and March, but only in Russia and Kazakhstan.
• It called at the same time for caution on the part of those active in the sector owing to the coronavirus pandemic.
• To ensure the market is not flooded with oil while pandemic-related risks to demand remain high, OPEC kingpin Saudi Arabia decided to cut its own production by one million barrels per day in both months.
• The decision represents a compromise between two of the biggest oil producers, Russia and Saudi Arabia, because Moscow had wanted to raise overall crude output by 500,000 barrels per day starting in February.
• Disagreements on the way forward are nothing new for the OPEC+ grouping, which must factor in a pandemic that shows no sign of abating and a vaccination campaign which has struggled to make headway in some parts of the world.
• Demand for crude cratered under the effects of the virus in 2020 and oil-producing nations have been trying to adjust output accordingly to underpin prices.

What is OPEC+?

·        OPEC+ is a group of 24 oil-producing nations, made up of the 14 members of the Organization of Petroleum Exporting Countries (OPEC), and 10 other non-OPEC members, including Russia.

·        The OPEC bloc is nominally led by Saudi Arabia, the group’s largest oil producer, while Russia is the biggest player among the non-OPEC countries.

·        The format was born in 2017 with a deal to coordinate oil production among the countries in a bid to stabilize prices.

·        Since then, the group has reached deals for members to voluntarily cut and ramp-up production in response to changes in global oil prices.

·        OPEC accounts for around one-third of the world’s oil supply, with the non-OPEC members bringing the total share of global oil covered by the deal to just under half.

·        The world’s largest energy producer, the U.S., is not part of the deal, nor is China or other leading Western producers such as the U.K., Canada and Norway.

https://www.thehindu.com/business/Industry/opec-approves-slight-crude-output-increases/article33504610.ece?homepage=true