OPEC and other oil-producing nations led by Russia, trying to gauge the strength of the global economy as the coronavirus continues to rage but with vaccines on the horizon, reached a compromise on Thursday to modestly increase production in January.
But the talks revealed strains in the unwieldy group, known as OPEC Plus, which has tried to manage the oil market since 2016. These tensions could make it more difficult for the producers to stay in line with production targets as the global economy recovers in the coming months.
Under the agreement, members of the Organization of the Petroleum Exporting Countries along with Russia and other countries will increase production by 500,000 barrels a day in January and, potentially, by a similar amount in the following months. The increase, less than 1 percent of the global oil market, comes while demand is still under pressure from the impact of the coronavirus pandemic.
The group will also hold monthly meetings to sign off on further adjustments.
The arrangement was a compromise between countries that wanted to proceed with a much larger increase of two million barrels a day, which had been agreed upon at an earlier meeting, and others, led by Saudi Arabia, that preferred to maintain current production cuts, estimated at 7.7 million barrels a day, given the uncertainties stemming from the pandemic.