OPEC meeting filled with ambiguity
Members of OPEC, or the Organization of the Petroleum Exporting Countries, met on Friday and agreed to increase crude oil production. Head of OPEC, Suhail Mohammed Faraj Al Mazroueim, announced that involved nations will begin producing at the maximum output allowed by an agreement made in 2016.
In 2016, OPEC nations voted to limit production to a certain amount so that they would be able to keep prices at a decent level and limit an oversupply of oil. However, after countries such as Venezuela experienced oil shortages, supply fell sharply and consequently, prices began to rise dramatically. After Friday’s decision, production is expected to increase by at least 600,000 barrels a day, according to Nigerian Energy Minister Emmanuel Kachikwu.
However, the nations which will be expected to supply these additional barrels of oil remain ambiguous. Russia and Saudia Arabia, two major oil producers, are expected to generate more oil. However, no specific countries are currently under obligation to increase production.
Even after the meeting, however, MRL Corporation CEO Cornelia Meyer reported that during the second half of 2018, the world could face a daily oil shortage of two million barrels. President Trump, who frequently criticizes OPEC, tweeted this on Friday:
Hope OPEC will increase output substantially. Need to keep prices down!
Oil prices have risen over 20% this year, and many countries’ economies have subsequently been hurting. OPEC reports that an increase will likely take time to aid affected economies across the globe, especially if there is still an expected daily shortage of nearly two million barrels.
Although this meeting showed significant progress for OPEC, they may have to more specifically allocate production targets to meet their daily goal.
Featured image via Flickr/alex.ch
