The OPEC cartel and its allies have agreed to increase crude output by just 100,000 barrels a day, in what analysts have described as an insult aimed at US President Joe Biden.
Ministers from the 13-member group and its allies, led by Russia and known as OPEC+, met in a closed-door video meeting on Thursday and marked an increase in production equivalent to 86 seconds, or a 0 .1% of global oil demand.
September’s minuscule boost is understood to be seen as a rebuff to Biden, who visited influential OPEC member Saudi Arabia last month to encourage the Gulf state to boost output to help the global economy in bad shape.
In response to the increase, Raad Alkadiri, managing director of energy, climate and sustainability at Eurasia Group, said: “This is so little as to be meaningless. From a physical point of view, it is a marginal point. As a political gesture it is almost insulting.”
Brent crude prices rose to $102 (£83.92) a barrel, a jump of $3, after the OPEC decision, but then retreated.
Explaining the reasons for the small increase, OPEC members said the “very limited availability of excess capacity” meant they had to proceed with “great caution” in response to “severe supply disruptions”.
He added that “chronic underinvestment in the oil sector has reduced excess capacity” in all major sectors.
The group also warned that “underinvestment” in the upstream sector – the search for new oil reserves – could negatively affect oil supply “in a timely manner” to meet increased demand beyond 2023.
Oil production has previously been increased by OPEC and its allies by about 430,000-650,000 barrels per month, but some members of the cartel have exhausted their production potential.
The group had agreed to phase out all production cuts implemented during a period of lower demand during the Covid-19 pandemic in 2020.
However, in June OPEC and its allies were nearly 3 million barrels a day below their quotas as sanctions on some members and underinvestment by others inhibited their ability to increase output.
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Only Saudi Arabia and the United Arab Emirates are believed to have excess capacity to increase production.
It comes after Biden and French President Emmanuel Macron met Crown Prince Mohammed bin Salman separately in recent weeks.
A US administration official said Wednesday it was “a step forward” and added that Biden wanted to see more increases.
The mending of relations with the oil-rich state comes despite the killing of journalist Jamal Khashoggi at the Saudi consulate in Istanbul in 2018, which a UN investigation described as an “extrajudicial killing for which Saudi Arabia”.