OPEC+ agreed to increase oil production Sunday, as demand roars back and prices surge, ending a dispute between the United Arab Emirates and Saudi Arabia.
Oil prices soared about two weeks ago after major producers, including Saudi Arabia and the UAE, fell out over plans to increase production in the face of rising global demand.
Now the group is raising overall oil production by 400,000 barrels per day on a monthly basis, starting in August, according to a statement. In December, the oil producers will assess market developments and participating countries' performance and move forward from there.
The news comes after the International Energy Agency warned that the major oil producers' failure to agree on supply increases could elevate fuel prices, stoking inflation and weighing on the Covid recovery.
The new deal is set to undo the production cuts that OPEC+ made at the start of the pandemic, signaling an eventual return to pre-pandemic production levels.
Oil prices crashed last spring when the world came to grips with the reality of the health crisis. Prior to Sunday's agreement, OPEC+ has only gradually added back production that it aggressively cut during last year's oil crash.
But now as economies open back up, there is a rapid resurgence in oil demand, and OPEC+ is trying to keep up. In June, US oil hit $70 a barrel for the first time in three years, and Brent crude, the global benchmark, currently sits at about $73 per barrel.