With oil prices reaching their highest level in about 2.5 years, the 13 OPEC countries led by Saudi Arabia and with allies such as Russia are considering ramping up oil production. OPEC consists of: Iraq, Iran, Kuwait, Saudi Arabia, Venezuela, Libya, United Arab Emirates, Algeria, Nigeria, Gabon, Angola, Equatorial Guinea and Congo-Brazzaville. Demand for oil has increased as many economies are experiencing a strong recovery after the corona crisis. However, they can also choose to limit the supply and thus increase the oil price.
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Russia would like to increase production, while Saudi Arabia thinks that a gradual approach is more beneficial for the OPEC+ countries. One explanation for the differing views could be that Russia, unlike other OPEC+ countries, feels less budgetary pressure to maintain high prices. Oil prices fell during the corona crisis because the demand for oil also decreased. Keeping the price high now can make up for losses previously suffered.
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Experts expect that the countries will reach a compromise. They think OPEC+ countries will use some of the massive capacity shut down last year, but not run at full capacity. The average expectation is that the countries will increase oil production by 550,000 barrels per day. Roughly 10 percent of the volume remains unused.
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