Frank Kane

DUBAI: The oil producers’ alliance led by Saudi Arabia and Russia held the line on supply for the next month on Monday even as the price of crude leapt back beyond $80 to a three-year high.

A virtual meeting in Vienna of ministers from the 23-strong OPEC+ group agreed to stick to plans to increase output by 400,000 barrels a day next month, despite calls for action to head off the surging oil price.

Brent crude, the global benchmark, was more than 3 per cent up at $82 in afternoon trading, its highest since late 2018.

The ministers said they took their decision “in view of current oil market fundamentals and the consensus on its outlook.” They also restated the “critical importance” of sticking to agreed output levels, even though some producers have not been able to meet the new output levels.

Kieran Clancy, commodities analyst at consultancy Capital Economics in London, said: “OPEC managed less than half its planned increase in production in August, largely due to disruptions in Angola and Nigeria.”

OPEC+ has been under some pressure from the Biden administration in the US to pump more crude to satisfy rising demand and head off a price spike as economic recovery accelerates.

Some analysts believe Brent will go through the $100 barrier in the first half of next year if supply is not increased.

Saudi Arabia, the OPEC member with most spare capacity, is reluctant to change its strategy of gradually returning output to pre-pandemic levels by the end of next year. Rising prices and output is a win-win formula for the Kingdom.

“If oil output continues to fall short of the group’s targets, oil prices could remain high into next year as well,” Clancy said.

West Texas Intermediate, the US standard, also jumped, to nearly $78 a barrel, after the OPEC+ decision.