The international oil benchmark, Brent crude, tumbled below the $70 per barrel mark yesterday after the Organisation of the Petroleum Exporting Countries and its allies agreed to increase their production by 400,000 barrels per day starting from August.
Brent, against which Nigeria’s crude oil is priced, fell by $5.01 to $68.58 per barrel as of 7:25pm Nigerian time, the lowest level since May 21.
After two and a half weeks of wrangling, OPEC and its allies, a group called OPEC+, resolved to increase their overall production by 400,000bpd on a monthly basis starting from August until phasing out the 5.8 million bpd production adjustment.
The alliance also granted five countries – Saudi Arabia, Russia, the UAE, Iraq and Kuwait even higher output targets starting in May 2022, according to S&P Global Platts.
The OPEC+ resolution puts an end to an acrimonious spat between Saudi Arabia and the UAE, which had arisen after the UAE had objected to Saudi Arabia’s plan to tie OPEC+ production increases to a lengthening of the supply management pact.
The UAE had insisted that its baseline production level, from which its quota is determined, be raised first.