International benchmark Brent crude is up 43 per cent year-to-date and up more than 60 per cent from this time last year, with many forecasters expecting to see oil trading at $80 a barrel in the second half of 2021. Brent closed at $73.59 a barrel at the end of the trading day on Friday.
The agreement, yesterday, followed a temporary but unprecedented gridlock that began in early July and saw the United Arab Emirates reject a coordinated oil production plan for the group spearheaded by its kingpin, Saudi Arabia. While the 13-member organisation has seen disagreements before, this was the first public rift between the UAE and Saudi Arabia, which are close allies.
Yesterday’s agreement revealed baseline increases for four of OPEC’s member states and one non-OPEC state beginning in May of 2022: the UAE, Saudi Arabia, Iraq, Kuwait, and Russia, the last of which is not an OPEC member but a leader of OPEC+. The UAE’s baseline for oil production will be raised from 3.16 million barrels per day to 3.5 million barrels per day, though short of the 3.8 million it reportedly initially requested. Saudi Arabia’s baseline will be increased from 11 million to 11.5 million barrels per day.