OPEC+ 7monthly daily 188,000barrel production increase agreement, impact limited
OPEC+ 7at its meeting on 7the monthly daily production by 188,000barrels for 4consecutive months. However, observers point out that restrictions on vessel traffic through the Strait of Hormuz are limiting the expansion of actual supplies in circulation.
OPEC+ 7held a meeting on 7the monthly production by 188,000barrels. This agreement marks the 4consecutive month of production increases. The group said it is gradually reversing the voluntary production cuts agreed in 2023.
This decision is 6the same as the production increase in 4~5the daily increase in 206,000barrels was applied during this period. Changes in participation by some member countries were reflected in the adjustment.
OPEC+ stated in its agreement that it continues to reduce the voluntary production cuts. The cuts are being gradually withdrawn from the agreement set at the original meeting for 1,650,000barrels per day. A phased restoration is being carried out at each meeting.
It was raised that restrictions on vessel traffic in the Strait of Hormuz are continuing and that logistics flows are not running smoothly. Jorge Leon, head of geopolitical analysis at Rystad Energy, said, "This is essentially closer to a policy signal than to an actual increase in supply." He explained that announcements of increased production have limited significance while the strait remains closed.
Meanwhile, the report said that even if the strait reopens, Saudi Arabia is the only country with surplus production capacity that can be put into operation immediately. It added that although the production quotas of some countries, including Russia, are being raised, some countries are producing below their targets. These factors are expected to influence the expansion of volumes in the short term.
Overall, the production increase agreement remains at the stage of continued announcements. However, an assessment has emerged that it will be difficult for the volume of products immediately entering distribution to increase significantly because of problems with shipping routes and the production capacity of some producing countries. The impact on oil prices is expected to remain limited for the time being.
Sources: 뉴시스 경제
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