OPEC Expects Increased Oil Production

OPEC Expects Increased Oil Production

OPEC and its partners were set to meet Tuesday to discuss increasing oil production, amid rising optimism that fossil fuel consumption will return to more normal levels as COVID-19 restrictions ease worldwide.

The organization, which accounts for more than a third of global oil production, and its alliance will discuss balancing oil demand and a possible output increase from Iran.

“There are many moving parts when it comes to factors affecting the global oil market, such as the pace of change during the [COVID-19] pandemic,” OPEC Secretary-General Mohammad Sanusi Barkindo said in a statement on Monday.

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“Given the diverse range of uncertainties, it is a tremendous source of comfort to the market that… partners continue to be such a reliable and dependable component contributing to oil market stability.”

Mohammad called Iran, a founding OPEC member, an “extremely important and valued member” and said he expects Tehran’s exports to be “orderly” and done in a “transparent fashion.”

The oil consumption market has changed significantly over the past few months when OPEC members struggled with cutting production amid sagging demand due to a year of coronavirus-related impacts.

“The market is now facing the exact opposite dilemma of April 2020,” analyst Louise Dickson of Rystad Energy told Bloomberg. “Producers now have just as delicate of a task to bring back enough supply to match the swiftly rising oil demand.

“If markets over-tighten, a flare-up in prices could jeopardize the global economic recovery.”

Oil prices have risen in recent weeks with a greater return to air travel worldwide. In the United States, prices rose last week in the run-up to the Memorial Day holiday weekend.

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