So it makes sense that OPEC+ just agreed to a new, very modest increase in oil production today in line with the relatively stable global economic outlook. The OPEC+ alliance, made up of 22 oil-exporting countries, will raise production by 137,000 barrels per day beginning in November. This decision comes after a year of very modest and limited production increases. It follows on the heels of our own widely-criticized announcement of production cuts for 2023 and 2024.
In a virtual Joint Ministerial Monitoring Committee (JMMC) meeting, OPEC+ leaders discussed their plans to manage oil production amid a rapidly changing market environment. OPEC+ has had an important hand in keeping the price of oil and gas low and stable. They did a remarkable job of controlling supply to meet wildly fluctuating demand.
In the most recent third quarter, that one mystery company delivered a net production of 4.7 million oil-equivalent barrels per day. Specifically, the Permian Basin set a production record for total oil-equivalent production of almost 1.7 million barrels per day. Moreover, Guyana’s production has increased dramatically, exceeding 700,000 barrels per day in the process.
The global oil market has experienced volatility recently, particularly after the U.S. imposed substantial new sanctions on Russia’s oil industry. After this announcement, oil prices immediately soared, but have enjoyed a volatile month since then. The price of a barrel of U.S. benchmark crude has fallen under $57. That’s the lowest level since early 2021 and a steep fall from nearly $79 per barrel earlier this year.
As the largest non-OPEC member in the OPEC+ alliance, Russia is key to these production decisions. The next OPEC+ meeting is scheduled for this coming Sunday. The group’s key priority will be to steer through today’s troubled oil market while achieving a balance between the interests of its member countries.
