OPEC+ nations on Thursday agreed to increase oil output by about 50 percent for the next two months after initially standing by a 400,000-barrel release.
Ministers announced an agreement to increase output in July and August by 648,000 barrels a day in July and August.
Gas prices in the U.S. saw another spike heading into the Memorial Day holiday, while across the Atlantic, European Union members reached an agreement on banning Russian oil imports in response to the country’s invasion of Ukraine. As recently as earlier Thursday morning, U.S. prices hit another record average high of $4.71 a gallon.
The move represents a reversal after the oil-producing nations had previously refused to budge on output, even after oil prices soared following Russia’s invasion of Ukraine. On May 5, its second most recent meeting, OPEC+ announced it would stick to the 400,000-barrel figure in the wake of the initial EU sanction announcements.
Russia, a member of the OPEC+ bloc of oil-producing countries that are aligned with OPEC but not members, has also seen its production fall amid international sanctions. Russia is the world’s third-largest oil producer, behind the U.S. and Saudi Arabia. OPEC+ data indicated crude production in Russia fell by nearly 9 percent in April, before the EU announcement but after numerous international sanctions, including an American import ban.
The Biden administration had previously appealed to Saudi Arabia, the de facto leader of OPEC, to produce more to handle the energy crunch in the U.S., but to no avail.
White House press secretary Karin Jean-Pierre said in a statement Thursday the U.S. “welcomes” the news.
“This announcement accelerates the end of the current quota arrangement that has been in place since July of last year and brings forward the monthly production increase that was previously planned to take place in September,” she said.
It remains to be seen how the increase will affect gas prices, if at all. Saudi officials argued in May an increase would have no effect. Energy Minister Abdulaziz bin Salman, defending that month’s smaller increase, said there remain “physical impediments that no producer can solve.”