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Thursday, April 25, 2024
HomeNewsEconomyOPEC Acquiesces, Will Increase Oil Production By Nearly 1M Barrels Per Day

OPEC Acquiesces, Will Increase Oil Production By Nearly 1M Barrels Per Day

Graphic concept of relations between the United States (US) and the Organization of the Petroleum Exporting Countries (OPEC). (Photo: PPD/AdobeStock/Piotr Pawinski)
Graphic concept of relations between the United States (US) and the Organization of the Petroleum Exporting Countries (OPEC). (Photo: PPD/AdobeStock/Piotr Pawinski)

Graphic concept of relations between the United States (US) and the Organization of the Petroleum Exporting Countries (OPEC). (Photo: PPD/AdobeStock/Piotr Pawinski)

The Organization of the Petroleum Exporting Countries (OPEC) cartel agreed to increase oil production by almost 1 million barrels per day. The announcement came after cartel ministers met on Friday in Vienna, Austria.

The production increase will essentially undo most of a 1.2 million barrel cut OPEC decided to make in late 2016, which played a significant role in the increase in the price of oil.

OPEC is an intergovernmental organization of 14 nations founded in Baghdad back in 1960. The first 5 members were Iran, Iraq, Kuwait, Saudi Arabia and Venezuela. Since 1965, they’ve been headquartered in Vienna, Austria.

As of 2016, the 14 countries accounted for roughly 44% of global oil production and 73% of the world’s “proven” oil reserves. Prior to OPEC having such a major influence on global oil prices, they were previously determined by American-dominated multinational oil companies.

President Donald Trump has been calling publicly for the oil cartel to increase production and lower prices. Saudi Arabia, which is OPEC’s largest producer, sided with President Trump over Iran.

The latter had resisted calls for increased production.

Iranian oil minister Bijan Namdar Zanganeh said “we are not here to receive instruction from President Trump and apply it and implement it.”

However, in the end OPEC acquiesced. President Trump has forged a strong relationship with the new Kingdom of Saudi Arabia, which has sought to rout corruption, and it’s reaping rewards.

Need more in-depth analysis? Check out Brent Crude on PPD Markets!

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PPD Business, the economy-reporting arm of People's Pundit Daily, is "making sense of current events." We are a no-holds barred, news reporting pundit of, by, and for the people.

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