Oil prices rose above $75 a barrel as OPEC and a Russia-led group of producers met to weigh surging demand from the industrialized world.
The meeting of the Organization of the Petroleum Exporting Countries comes at a time when some of the historical dynamics of the oil markets have been thrown upside down by the pandemic. Demand growth from the developed world, which for years has stagnated, is on a tear as it emerges furiously from Covid-19 lockdowns. Meanwhile, the developing world—the source of almost all new oil demand in years past—is still sputtering.
A week ago, OPEC and allied producers led by Russia were leaning toward boosting production by half a million barrels a day, with more additions possible later in the year, The Wall Street Journal reported.
Going into formal deliberations being held remotely, Saudi Arabia, OPEC’s de facto leader, and Russia agreed Thursday to take up a proposal that includes a boost of about half a million barrels a day starting in August, according to people familiar with the talks, and then gradually increasing so-called OPEC+ output by a total two million barrels through December.
Negotiations over the details of the deal are still underway, and Saudi Arabia has in recent meetings changed course at the last minute. Another wrinkle: A deal may be conditional on the status of Iran sanction talks with the world powers. Tehran is negotiating a resumption of an Obama-era deal in which it would curb its nuclear ambitions in exchange for a lifting of sanctions on oil sales.