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Russia, OPEC Resist U.S. Pressure For Major Increase In Oil Output

Saudi Energy Minister Prince Abdulaziz bin Salman: "We still believe what we are doing is the right thing" on oil output (file photo).
Saudi Energy Minister Prince Abdulaziz bin Salman: "We still believe what we are doing is the right thing" on oil output (file photo).

Major oil-producing nations agreed to maintain their modest increase in output despite pressure from Washington and other major consuming nations for a larger rise to help put a lid on surging energy prices.

The so-called OPEC+ group -- 13 member nations and 10 of their partners -- on November 4 reconfirmed a decision made in July to gradually raise output on a month-by-month basis.

The group, led by Saudi Arabia and Russia, will continue to increase output by 400,000 barrels a day.

The next OPEC+ meeting is scheduled for December 2. The United States is not a member of the OPEC+ alliance.

In a statement, the group said the output decision was designed "to ensure a stable and a balanced oil market, the efficient and secure supply to consumers."

The White House expressed disappointed with the OPEC+ decision for only a modest increase, warning that the global economic recovery is endangered by rising fuel prices as demand outstrips supply.

"OPEC+ is a...collection of countries that set supply levels themselves. They have the capacity and the power now to act and make sure this critical moment of global recovery is not impaired," White House spokeswoman Karine Jean-Pierre said.

"OPEC+ production is what impacts global oil prices, which is what has an effect on gas prices at home."

The spokeswoman added that President Joe Biden has said the United States is “prepared to use all tools as needed" to ensure everyone has access to affordable energy.

Analysts said the statement indicated the U.S. government's willingness to use the national oil stockpile to flood the market, which could quickly lower prices.

After the U.S. comments, the Brent crude price fell $1.19 to $80.80 a barrel, while U.S. crude was down $1.64 at $79.22 a barrel. Prices reached $85 a barrel earlier this year, the highest level since 2014.

Other large oil-consuming nations -- including India and Japan -- also called for higher output to help lower prices.

However, Saudi Energy Minister Prince Abdulaziz bin Salman told reporters: "We still believe what we are doing is the right thing.”

Russian Deputy Prime Minister Aleksandr Novak said OPEC+ members considered “the pluses and minuses,” including the seasonal drop in demand in winter and the impact of the Delta variant of COVID-19 on world economies.

"There are some signs of decreased oil demand in the European Union in October. Global oil demand is still under pressure from the Delta COVID variant," Novak said.

The group’s members slashed output in 2020 as the coronavirus pandemic hit demand, but the group has eased production cuts this year as the global economy slowly recovers.

With reporting by AFP, Reuters, and AFP
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