Under American pressure, OPEC agrees to a minimal increase in its oil production

A lot of noise for nothing. While the foot calls of Westerners had multiplied in recent weeks, and the American president Joe Biden even traveled to Riyadh in mid-July to get Saudi Arabia to open the floodgatesand this, in order to curb the soaring prices, the Organization of the Petroleum Exporting Countries (OPEC) will have finally decided only a more than symbolic increase in its production of black gold.

At the end of its last meeting, which was held on Wednesday August 3 in Vienna, the member countries of the cartel agreed on an increase, of course, but only of 100,000 barrels per day for the month of September, which, Considering the additional barrels set in the previous months, ie 432,000 then 648,000 respectively, is marginal.

Read also: OPEC+ slows pace of production increases

“While some see it as a failure of the American diplomatic initiative last month, emphasizes Vincent Manuel, Investment Director at Indosuez Wealth Management, in fact, one of the real issues remains OPEC’s ability to produce more. » Today, the cartel and its partners are running a deficit of around 2.8 million barrels per day less compared to the last agreement to raise production in June 2022.

Half of this production shortfall comes mainly from Russia (1.4 million barrels per day), Nigeria and Angola, while Saudi Arabia produces slightly below its quota and the United Arab Emirates are online. “Saudi Arabia and the Emirates could jointly produce two million more barrels per day in theory”, explains Vincent Manuel. In addition to technical difficulties, geopolitics can explain the reluctance to move: “Even if Saudi Arabia was willing to meet US demands, partner countries like Russia – which have a say in raising quotas – want to keep prices high. »

A boon for the majors in the sector

Sword in the water? On the price side, in any case certainly. After dropping 2.5% to $92, the West Texas Intermediate (WTI) remained in the comfort zone in which it has been evolving for several weeks. Since the start of the war in Ukraine, and speculation around Russian production, the latter had reached a high in March of 123.70 dollars, a level to which it returned in mid-June before sliding towards the $95. Over the last three months, this drop in prices coincides with the first signs of recession, the fall in long rates and fears about Chinese demand under the effect of the resumption of Beijing’s “zero Covid” policy.

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