ANKARA

The Organization of Petroleum Exporting Countries (OPEC) and its allies agreed Wednesday to lower their current crude oil production cut level to 7.7 million barrels per day (bpd) starting in August, from the existing 9.7 million bpd.

The group known as OPEC+ has been curbing their crude oil output by a total of 9.7 million bpd from May 1 through July 31 in order to mitigate the adverse impact of the novel coronavirus on global oil demand.

With overall oil consumption rising around the world and global oil market approaching a rebalance, the 23-member group has agreed to curb its current production cut level by 2 million bpd starting Aug. 1.

"Demand is growing," Prince Abdulaziz bin Salman, energy minister of OPEC de facto leader Saudi Arabia, said after the conclusion of the 20th meeting of the Joint Ministerial Monitoring Committee (JMMC) via video link.

"The 23 countries within OPEC+ are opening and unlocking our economies. So we’re expecting growth in our domestic economies," he said.

Stressing the current change in transportation patterns around the world, Prince Abdulaziz said OPEC+ is expecting jet fuel, gasoline, and diesel consumption to grow in the coming months.

Prince Abdulaziz also underlined that some OPEC+ member countries that failed to fully comply with their individual output cut levels in May and June will reduce their crude production in July, August, and September in compensation.

That is why the "effective" total oil production cut level of OPEC+ could be around 8.1 million bpd in the month of August, he added.

"We are all equal. All of us have cut 23% of our production," Prince Abdulaziz said.

Russian Energy Minister Alexander Novak said the OPEC+ group is looking at how the market is developing and is adapting its estimates accordingly, adding that the market is very close to rebalancing.

Saying that OPEC+ needs to continue monitoring global oil inventories, he added that the group's rising crude output from August onwards "should not affect the market due to rising demand in domestic markets."

"The decision to increase production now is positive for the oil market because it shows recovery in the industry. It will also provide a rise in production, increase in taxes, and higher GDP," he concluded.

The next JMMC meeting of OPEC+ nations is set for Aug. 18.