The Opec cartel and its allies have agreed to increase the production of crude by a paltry 100,000 barrels a day, in what analysts have described as an insult directed at the US president, Joe Biden.
Ministers from the 13-member group and its allies, led by Russia and known as Opec+, met on Thursday at a closed-door video meeting and rubber-stamped the increase in output that is the equivalent of 86 seconds, or 0.1%, of global oil demand.
The minuscule boost from September is understood to be seen as a snub to Biden who visited influential Opec member Saudi Arabia last month to encourage the Gulf state to increase output to assist the ailing global economy.
Responding to the increase, Raad Alkadiri, the managing director for energy, climate, and sustainability at Eurasia Group, said: “That is so little as to be meaningless. From a physical standpoint it is a marginal blip. As a political gesture it is almost insulting.”
Brent crude oil prices increased to $102 (£83.92) per barrel, a jump of $3, after Opec’s decision.
Explaining its reasons for the small increase Opec members said the “severely limited availability of excess capacity” meant they had to proceed with “great caution” in response to “severe supply disruptions”.
It added “that chronic underinvestment in the oil sector has reduced excess capacities” in all major sectors.
The group also sounded a note of caution that “insufficient investment” in the upstream sector – finding new oil reserves – could negatively impact the supply of oil “in a timely manner” to meet increased demand beyond 2023.
Oil output has previously been increased by Opec and its allies by about 430,000-650,000 a month but some members of the cartel have exhausted their output 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 almost 3m barrels a day below its quotas as sanctions on some members and low investment by others inhibited its ability to boost output.
Only Saudi Arabia and the United Arab Emirates are believed to have some spare capacity left to increase production.
It comes after Biden and the French president, Emmanuel Macron, met Crown Prince Mohammed bin Salman separately in recent weeks.
A US administration official said on Wednesday it was “a step forward” adding that Biden wants to see more.
The schmoozing of the oil-rich state comes despite the murder of the journalist Jamal Khashoggi in the Saudi consulate in Istanbul in 2018 that was described in a UN investigation as an “extrajudicial killing for which Saudi Arabia is responsible”.