Business News Asia
Saudi Arabia, OPEC’s largest producer, has rejected calls to increase oil supplies from oil-exporting countries and their allies (OPEC+), citing economic uncertainties. However, the increase of 400,000 barrels per day already agreed in the middle of the year will be continued.
OPEC+ believes that the U.S. already has the ability to significantly increase its production. Assuming the global economy needs more energy, it can produce enough. Saudi Arabia and Russia are increasingly confident that higher prices will not cause the shale gas industry in the U.S. to increase production rapidly.
All oil producers lost income during the outbreak of COVID-19 and due to the need to recover the world economy. This made it possible to create a new blueprint, which lifted global Brent crude oil prices to a three-year high of $86.70.
Meanwhile, Saudi Arabia is concerned about its excessively rapid production. It is concerned that global oil demand remains under pressure from COVID-19 variants and the pace of economic recovery. This can be seen in the sharp increase in oil stocks at the end of 2021, which is due to slow consumption. Oil demand in the EU also fell in October. As a result, OPEC+ has decided not to produce additional barrels.
The world’s largest oil producer, the United States, which is not a member of OPEC+, saw its production drop dramatically in 2020 as production recovered much more slowly than expected. Therefore, it called on the main G20 energy producing countries with reserve capacity to boost production to ensure a stronger recovery of the global economy. A whole range of instruments is to be considered to ensure access to affordable energy.
The next OPEC+ meeting is scheduled for December 2.