ERBIL, Kurdistan Region — The Organization of the Petroleum Exporting Countries (OPEC) and its allies will continue increasing oil production as the global economy “continues to point in the direction of a durable recovery,” the organization’s secretary general said on Tuesday, with oil prices jumping to a new high.
During a virtual videoconference held on Tuesday between OPEC and its allies, Mohammad Sanusi Barkindo said he expected demand for oil to grow by 6 million barrels per day (bpd), with a further increase expected as global markets slowly open up amid ongoing COVID-19 vaccination campaigns.
“Today marks the start of the second month of the stepped-up production increases, and our compass continues to point in the direction of a durable recovery,” said Barkindo.
OPEC+ confirmed output will continue to increase as per an April decision, which ruled that production would grow by almost two million bpd between May and July. Production rates were initially cut in April of last year, with the outbreak of the coronavirus.
The news was reflected in the price of Brent crude oil, which stood at $71.2 on Tuesday evening. The price of Brent dropped to $20 in April of last year, before only bouncing back to $70 in March 2021.
Barkindo also said they are monitoring the ongoing nuclear talks in Vienna, saying Iran “is an extremely and valued member of OPEC.”
“We anticipate that the expected return of Iranian production and exports will occur in an orderly and transparent fashion, thereby maintaining the relative stability that we have worked hard to achieve since April of last year,” he added.
Iran currently produces around 3 million barrels of oil per day, and has not produced six million since before the 1979 Islamic revolution. Iran’s oil minister said on Monday that they “can easily achieve a daily production of 6.5 million barrels,” calling on increased oil production to be a top priority for the next government.
Iran’s 2015 nuclear deal with world powers allowed it to sell crude oil on the international market, but former US President Donald Trump withdrew from the accord in 2018, forcing Iran into clandestinely taking its oil abroad and selling it, likely at a major price markdown. Talks in Vienna are ongoing to try and revive the deal, and appear to be making progress.
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