Opec+ agrees to ease oil output cuts from May

Opec+ agreed on Thursday to gradually ease its oil output cuts from May, after the new US administration called on Saudi Arabia to keep energy affordable, mirroring former president Donald Trump’s practice of calling Opec’s leader over oil policy.

The group, which has been implementing deep cuts since oil prices collapsed in 2020, agreed to ease production cuts by 350,000 bpd in May, another 350,000 bpd in June and further 400,000 bpd or so in July.

Iran’s oil minister, Bijan Zanganeh, confirmed the figures, saying the group would have boosted output by a total of 1.1 million bpd by July.

Saudi Energy Minister Prince Abdulaziz bin Salman told a news conference after the Opec+ meeting that Thursday’s decision had not been influenced by any talks with US officials.

The minister said Saudi Arabia would gradually phase out its additional voluntary cut of one million bpd, by adding 250,000 bpd to the kingdom’s production in May, another 350,000 bpd in June and then 400,000 bpd in July.

Under Thursday’s deal, oil cuts implemented by the Organization of the Petroleum Exporting Countries, Russia and their allies would be just above 6.5 million bpd from May, compared with existing curbs of slightly below seven million bpd in April.

Brent crude, which slipped on news of the deal, was still trading above $63 a barrel, still more than 20 per cent up on the start of the year and not far from this year’s high around $71.

“We reaffirmed the importance of international cooperation to ensure affordable and reliable sources of energy for consumers,” Jennifer Granholm, the new energy secretary appointed by US President Joe Biden, said on Twitter after her call with the Saudi energy minister.

News of the call coincided with signs of a changing mood in informal discussions between Opec+ members. — Reuters