Leading oil producers attained a deal on Sunday, July 18, 2021, to increase production, a step that could help release the pressure on gas prices and inflation. The development would help as economies across the globe are facing challenges in post-pandemic lockdowns.
The deal by OPEC+ aims to start pumping more oil starting from August. It committed a disagreement between Saudi Arabia and the United Arab Emirates that had restricted the agreement at the beginning of July and caused oil prices to increase, shortly hitting six-year highs on July 6, 2021.
Even before that, prices for gasoline in the US had been slowly increasing. According to AAA, gasoline prices per gallon across the country are around USD3.17, which was around USD2.18 a gallon last year when pandemic lockdowns kept people close to home.As per the deal announced on Sunday, July 18, 2021, OPEC+, a group of 23 countries directed by Saudi Arabia and Russia, has agreed to increase output every month by 400,000 barrels per day, starting in August.
That will end up adding 2 percent to the global supply by the end of 2021. The group produces around 40 percent of the global crude oil.In a new statement released, OPEC+ addressed the current intensification of market fundamentals, with a clear sight of a boost in oil demand. It was an obvious amendment in attitude from the ultra-cautious way taken earlier by the Saudi oil minister Prince Abdulaziz bin Salman, the group chairman.