The OPEC Plus ministerial conference held on Tuesday and approved an increase in oil production in February by 400 thousand bpd. According to the official statement, the OPEC plus countries will be able to produce 40.894 million bpd in February, while Russia and Saudi Arabia will each have 10.227 million bpd share in this production. The forum maintained that the oil market is currently balanced and expects that after the first quarter of 2022 the market will begin to shift towards a surplus and oil reserves will grow. Earlier, OPEC estimated a possible surplus in the oil market in 2022 at 1.4 million bpd. This forecast takes into account the decisions of OPEC Plus to regulate oil production, as well as the release of oil reserves from the strategic reserves of the United States.
The last OPEC plus Ministerial meeting was held in virtual mode during July 2021. The Meeting discussed the ongoing consolidation of market fundamentals, with oil demand showing clear signs of improvement and OECD stocks falling, as the economic recovery continued in most parts of the world with the help of accelerating vaccination programmes. The forum decided to extend the agreement on limiting oil production until the end of 2022. The OPEC plus countries also agreed to gradually increase the production limits of the five member countries including Saudi Arabia, UAE, Russia, Kuwait, and Iraq during the coming months. The OPEC nations increased their production to a specific level to counter the financial impact of COVID-19 restrictions. Meanwhile, the OPEC plus Ministers extended the plan to compensate the member nations for the overproduction of oil until the end of June 2022. The OPEC nations have created a monopoly in the oil sector through tactful schemes based on global oil requirements, geopolitical environment, economic situation and rivalries across the world. The cartel has ruled the world’s economy for decades and is currently facing challenges to maintain its grip in the market. In fact, the world must work for rapid introduction of nuclear energy, electric vehicles, solar and wind energies to end the OPEC’s hegemony in the days to come.
