Can we now expect the OPEC to drop the oil prices in the near future?

At the outset, it is looking like there could be some good news for India on the oil price front. To begin with, UAE and Saudi Arabia have finally agreed to boost supply after crude prices had touched a 30-month high of $77/bbl in the Brent market. Now that price has fallen to $73/bbl. Apart from the original OPEC members, the OPEC+ combination now also includes other major global oil exporters like Russia, Mexico and Kazakhstan.

One of the reasons why oil rallied in the last 1 year from $20/bbl to $77/bbl was the OPEC+ cutting output by nearly 10 million bpd amidst the pandemic. Today, that quota cut stands reduced to just about 5.8 million bpd. Now, both UAE and Saudi Arabia have conveyed that between August and December 2021, the OPEC+ will increase the supply by another 2 million bpd, which will bring relief to crude prices, although market will be short on supply.