Opec+ nations on Sunday agreed to raise oil production quotas by over 2 lakh barrels per day amid the ongoing United States-Israel-Iran war in West Asia.
This is the second consecutive month that key oil-producing countries have raised their oil production quota.
However, the grouping has warned that even if the quota gets increased, the main task would be to repair the war-hit energy facilities, which is going to be costly and time-taking.
Opec+ is an alliance between the 12 Organization of the Petroleum Exporting Countries (Opec) members and 10 other major non-Opec oil-exporting nations.
Formed in 2016, this coalition has a share of nearly 60 percent in global oil production. In the latest decision, the increase in production quota will be led by Saudi Arabia and Russia.
Both the countries will add 62,000 barrels of oil per day, while Iraq will contribute 26,000 barrels per day. The UAE will add 18,000 barrels per day.
Countries like Kuwait, Kazakhstan, Algeria, and Oman are making smaller additions.
Apart from this announcement, the grouping also raised the issue of disrupted maritime routes, indicating the closure of the Strait of Hormuz since the war in Iran.
“The eight countries also expressed concern regarding attacks on energy infrastructure, noting that restoring damaged energy assets to full capacity is both costly and takes a long time, thereby affecting overall supply availability,” a statement from the consortium read.
It cautioned that any actions undermining energy supply security, whether through attacks on infrastructure or disruption of international maritime routes, increase market volatility.
However, it appreciated the eight countries that are making the effort to find alternative routes for continued supplies, particularly through the use of alternative export routes.
According to experts, even when these countries have raised the production quota, the actual impact may be limited as many countries are already producing below their assigned targets due to capacity constraints and ongoing disruptions.
