OPEC, Russia Agree To Pump More Oil Despite Concerns About Omicron

The world's largest oil-producing nations announced that they would continue to pump more crude despite concern about the COVID-19 Omicron variant.

On Thursday, the OPEC+ bloc, which consists of the Organization of the Petroleum Exporting Countries as well as producers like Russia and Mexico, agreed that they would stay with their earlier output plans. This move was previously endorsed by members at the group's last meeting in July.

Further details about the deal have not been released, but one agreement was that Russia and Saudi Arabia will be able to increase oil production by 109,000 barrels per day each to 10.122 million barrels in January, according to the Russian TASS news agency.

Concern about the Omicron variant’s impact on the global economy looms in the background of this decision. Since its discovery in southern Africa last week, several countries, including the U.S., moved to restrict travel from the region to stem its spread. However, President Joe Biden made clear that he does not anticipate the U.S. economy returning to a national lockdown.

Complicating the concerns about the new strain is the fact few understand how contagious it is compared to past variants. One delegate who attended the OPEC meeting pointed to this fact after the meeting in Vienna as a reason why the decision to boost oil production was made.

"We have to closely monitor the market to see the real effect of Omicron," one OPEC+ delegate said after the talks, according to the London-based Asharq al-Awsat newspaper.

Throughout 2021, demand has resurged in many countries around the world as public health restrictions eased or came to an end. As a result of continuing supply chain snarls on top of this high demand, inflation has soared, driven in part by a leap in energy prices.

The U.S., China, India, South Korea, Japan and the U.K. coordinated a release of their strategic oil reserves to lower prices. Biden has called on OPEC+ to increase oil production to push them down further, something the bloc was initially reluctant to do.