This is again a decision for the OPEC + group of oil-producing countries
Analysts expect the group, known as OPEC +, to be on a gradual growth schedule in 2020 to recover from the decline in production created during the depth of the coronavirus epidemic.
So far, that steady pace has meant adding 400,000 barrels per day at the beginning of each month. According to the August edition of OPEC’s official monthly bulletin, in early May, the level will be adjusted to 432,000 barrels slightly higher due to the revised baseline production volume.
The slight monthly increase did not help ease the rise in oil prices associated with the recovery in global demand for fuel for cars, trucks and aircraft. Ukraine’s war and sanctions against Russia, the world’s largest oil exporter, accounting for about 12% of global supplies, have also been linked to higher prices amid fears it could be disrupted.
Oil prices have a big impact on how much US drivers pay for gas at the pump To tackle higher gas prices – averaging $ 4.24, $ 1.38 higher than a year earlier – US President Joe Biden is preparing to order the release of up to 1 million barrels per day from strategic petroleum reserves, with an announcement expected on Thursday.
In November, the White House announced the release of 50 million barrels in coordination with other countries, and since the start of the war, the United States and 30 other countries have agreed to release an additional 60 million barrels.
Oil prices have fallen in anticipation of a new release, but analysts at Unicred Bank say the impact of such a move on prices is “usually short-lived.” Because reserves are limited, and production deficits are open-ended. Once the reserves fall below a certain level, the market may fear that they will not be able to cope with further deficits and prices will rise.
Higher oil prices mean more export earnings and tax revenues for the Russian government, as well as some sanctions imposed on Russian banks and companies, as well as increasing the impact of foreign companies closing their businesses in the country.
Although Western sanctions have allowed banks to process energy payments, some buyers have avoided Russian oil. Buyers are reluctant to join the war or fear that a sudden embargo will prevent them from selling Russian oil.
Some OPEC + members are unable to meet their production quotas and prices are rising. OPEC’s de facto leaders, Saudi Arabia and the United Arab Emirates, have surplus production capacity, but they have cut off production and disrupted the group’s agreed allocations.
Both Saudi Arabia and the United Arab Emirates have voted in favor of a UN resolution calling for Russia’s withdrawal from Ukraine, but insisting they see OPEC + ‘s role as stabilizing world oil markets and separate from international politics.
UAE energy minister doubles OPEC alliance with Russia Russia is a key member of OPEC +, with 10 million barrels of oil per day, he said.
“And politics aside, that volume is needed today,” Suhail al-Majrooi said Monday. “If no one wants to come and bring 10 million barrels, we don’t see anyone who can substitute Russia.”
The United States, European countries, Japan and other countries have called on Gulf Arab oil producers to do more to help reduce oil prices. The Prime Minister of the United Kingdom Boris Johnson visited the United Arab Emirates and Saudi Arabia earlier this month, where he raised the issue.
The Brent crude international benchmark rose to around $ 140 – from $ 90 before the start of the war – before falling back. On Thursday, U.S. oil fell 4.5% to 2 102.90, while Brent fell 3.7% to 9 109.28.