The global oil market is handling the production increases by the Organization of the Oil Exporting Countries (OPEC) and its allies like Russia, as demand for oil picks up due to the economic recovery from the corona crisis.
That is what the oil minister of Kuwait said. The alliance, called OPEC+, will meet on Tuesday to discuss a further increase in production.
OPEC + is in the process of increasing production after it had been sharply lowered earlier to support oil prices in corona time. The crisis reduced oil demand, causing prices to plummet and creating a large surplus in the oil market. Oil prices have now recovered strongly, and demand is increasing, which offers OPEC + scope to increase production.
The meeting will discuss an increase in production in August. Production in May, June and July will be gradually increased. According to Saudi Arabia, considered the leader of OPEC and Russia, the surplus has been virtually eliminated. However, many uncertainties remain, such as the new virus wave in India, a significant consumer of oil, and the reintroduction of lockdown measures against new outbreaks, including in Japan.
There could also be a lot of oil from Iran on the market again if that country manages to conclude a renewed international nuclear agreement and the economic sanctions of the United States against Iran are lifted.
Incidentally, it is not certain whether a production decision will be taken on Tuesday at the OPEC headquarters in the Austrian capital Vienna. Oil market players will be watching closely for any hints of a production increase later this year.