OPEC+ sticks to gradual oil output hikes

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OPEC and its allies, during the 20th ministerial meeting held today, Sept. 1, agreed to stick to the existing policy of gradual oil output hikes, despite revising its 2022 demand outlook upwards.

The group confirmed the production adjustment plan approved in the previous meeting by increasing the output by 400,000 barrels per day (bpd) a month, starting from October 2021.

In addition, it was agreed to extend the deadline for its compensation mechanism to the end of December. Member countries that exceeded their output ceilings must submit compensation plans by Sept. 17.

"While the effects of the COVID-19 pandemic continue to cast some uncertainty, market fundamentals have strengthened and OECD stocks continue to fall as the recovery accelerates," the group noted.

It added that overall conformity to the production adjustments was 110% in July, including Mexico, reinforcing the trend of high conformity by participating countries.

The 21st ministerial meeting of OPEC and non-OPEC will be held on Oct. 4.