Following US pressure on OPEC leaders, the organization agreed in early June to increase oil production by 650,000 barrels a day over the next two months. According to The Financial Times, this is partly a gesture of goodwill from Saudi Arabia, which US leader Joe Biden is set to attend in the coming weeks. The announcement made the price of a barrel drop to $ 112 in early June. However, shortly afterwards, the price resumed its rise.
“The challenge is that, although OPEC countries are allowed to increase oil production, they have not been able to meet the planned quotas in the past,” Rob Tumel, head of investment fund Tortoise Capital, told Business Insider. According to S&P Global, the organization’s smallest oil producers have been unable to meet their quotas for several months, short of about 2.6 million barrels a day from previously set targets.
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