It did not take long. With oil futures rising to levels not seen since 2018, officials from the Organization of the Petroleum Exporting Countries and allied producers like Russia met on Tuesday and decided to stick with a plan to gradually ease production curbs agreed in April.
OPEC meetings sometimes drag on for days, but Prince Abdulaziz bin Salman, the Saudi oil minister, said during a news conference that Tuesday’s gathering had required less than half an hour. The rising price of oil probably didn’t hurt.
The group, known as OPEC Plus, is still adjusting to a market that collapsed a year ago when the pandemic took hold of the global economy, forcing a huge cutback in petroleum output. Under the plan the group agreed to in April and confirmed at Tuesday’s meeting, the oil states will add 350,000 barrels per day in June and 441,000 barrels per day in July.
Saudi Arabia will also continue to unwind the one million barrels a day in voluntary cuts it announced earlier this year. The Saudis plan to produce 350,000 barrels a day in June and 400,000 barrels a day more in July on top of the other states’ expansions.
Analysts say that even with these modest additions in production, the oil market is likely to be tight as increased economic activity leads to more petroleum consumption, burning off the glut that built up in the early months of the pandemic. “Demand growth is outpacing supply gains,” even with the OPEC Plus increases, said Ann-Louise Hittle, an analyst at Wood Mackenzie, a market research firm.
Oil prices were rising on Tuesday. Brent crude, the international benchmark, was above $71 a barrel, while the U.S. benchmark, West Texas Intermediate, gained about 3.5 percent, to more than $68.50 a barrel. Both prices were the highest since October 2018.
OPEC ministers are watching indirect talks between Iran, a member of the cartel, and the United States that could lead to an easing of sanctions and a surge in Iranian crude onto the world market. OPEC figures that the outcome of the talks is still unclear and a major increase in Iranian oil output, if it comes, is months away.
Prince Abdulaziz said that the issue of Iran was not discussed during the meeting but that OPEC Plus would continue its recent practice of holding monthly meetings to decide on adjustments in output as necessary.
“We know the situation prevailing today allows us to proceed with what we are planning in July,” he said.