The countries members of the oil cartel OPEC and allies (OPEC+) should pump more oil to prevent petrol prices from rising. That could hinder the economic recovery. Top officials of the US Biden administration have called for this.
US National Security Adviser Jake Sullivan criticized the world’s largest oil producers, including Saudi Arabia. According to him, the countries are not producing enough crude oil in the wake of the corona crisis. He spoke of a pivotal moment in the global recovery. “Then this just isn’t enough,” he said in a statement.
Gasoline prices in the US at the pump are around 3.18 dollars per gallon (almost 3.8 litres). That’s more than a dollar more than this time last year, according to the American Automobile Association.
The US message also underlined the new dynamics between Washington and OPEC. Biden’s predecessor Donald Trump had just threatened to withdraw military aid to OPEC leader Saudi Arabia overproduction, which he said was too high and detrimental to US oil companies.
The Biden administration’s drive to lower fuel prices also runs counter to efforts to be a global frontrunner in the fight against climate change. In addition, the United States wants the economy to become less dependent on fossil fuels. Instead, the focus should be on cleaner energy sources and electrification.
OPEC countries and allies, including Russia (OPEC+), had previously agreed to cut crude oil production by 10 million barrels per day to prop up prices. That amounted to about 10 percent of global demand. The restrictions were implemented as global energy demand collapsed during the coronavirus crisis.
In the meantime, the countries have gradually increased production. By July, the cut had been reduced to about 5.8 million barrels per day. At a meeting in July, OPEC+ agreed to ramp up production from August further. The countries will meet on 1 September to discuss the situation.