The OPEC+ group gave the go-ahead to lift their oil production targets for September by 100,000 bpd as recommended by the Joint Ministerial Monitoring Committee (JMMC) which met earlier today, Amena Bakr, Chief Opec Correspondent & Deputy Bureau Chief at Energy Intelligence, reported just as the ministerial meeting of OPEC+ began on Wednesday.
Today's OPEC+ meeting is the first meeting since the group decided to roll back by the end of August all the cuts from May 2020, when the current agreement started.
Analysts had expected the alliance to endorse either flat targets for September compared to August, or a slight increase.
Ahead of the meeting on Wednesday, the U.S. Department of the State approved on Tuesday a possible Foreign Military Sale to Saudi Arabia—OPEC's top producer—of PATRIOT MIM-104E Guidance Enhanced Missile-Tactical Ballistic Missiles (GEM-T) and related equipment for an estimated cost of $3.05 billion. The State Department also cleared a possible Foreign Military Sale to the United Arab Emirates (UAE) for an estimated cost of $2.245 billion.
Saudi Arabia and the UAE are believed to be the only two producers in OPEC+ and in the world currently holding enough spare capacity to raise their oil production. A 100,000 bpd increase for the entire group will likely mean less than a 30,000 bpd increase for Saudi Arabia, and a less than 10,000 bpd increase for the UAE.
Earlier this week, a Fox Business correspondent reported that Saudi Arabia was planning to advocate for higher oil production at Wednesday's OPEC+ meeting. Fox Business' White House correspondent Edward Lawrence cited an unnamed source as saying that Saudi Arabia's King Salman had made the assurance to U.S. President Joe Biden during their meeting in the Kingdom on July 16.
Higher oil production was one of the reasons for President Biden's visit to the Kingdom last month, although the White House refrained from stating it openly.
Oil prices jumped after the announcement.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More