Specifically, the cartel will increase the quota system by 548.000 barrels per day starting in August, a figure that exceeds the increases agreed upon in previous months (411.000 barrels per day).
This decision reinforces the change in strategy adopted by the organization to regain market share. The initial roadmap established an increase in production of 2,2 million barrels per day over 18 months; however, this objective will likely be reached next September, a year earlier than planned. As a result, the market for oil could register an excess supply exceeding one million barrels this year. The main proponent of this reorientation is Saudi Arabia.
It's worth remembering that the Desert Kingdom had reduced its production by nearly 20% in recent years to keep the market under pressure. However, estimates do not rule out the possibility that the crude oil price could fall below $50 a barrel in the coming months, provided no new unexpected geopolitical events occur.
Source: CESCE
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