Saudi Press

Saudi Arabia and the world
Sunday, Oct 01, 2023

OPEC+ answers Biden’s diplomacy with tiny oil-output hike

OPEC+ answers Biden’s diplomacy with tiny oil-output hike

OPEC+’s small increase in output offers little comfort for consumers hit hard by soaring oil prices.

OPEC+ responded to months of diplomatic efforts from US President Joe Biden with one of the smallest oil production increases in its history.

The cartel will add only 100,000 barrels a day of oil in September, giving a tight market extra supplies at a much slower pace than in recent months despite pressure from the White House to help cool prices.

The 23-nation alliance will divide that amount proportionally between members, and with only the Saudis and the United Arab Emirates able to bolster production, just a fraction of it is likely to be delivered. For July and August, the group had pledged to add more than 600,000 barrels a day to the market.

The increase offers little respite for consumers suffering the inflationary squeeze of high oil prices. Brent crude erased earlier losses and was little changed at $100.59 a barrel as of 3:10 p.m. in London.

“From a global balance perspective, today’s minuscule quota increase — the smallest since 1986 in absolute terms and smallest ever in percentage terms — is noise,” said Bob McNally, president of Washington-based consultant Rapidan Energy Group and a former White House official. “Though, if pump prices keep falling, the White House will likely claim credit.”

Ministers endorsed the proposal at an online meeting on Wednesday, according to a statement on the OPEC website. There were no discussions about whether the Organization of Petroleum Exporting Countries and its allies would keep increasing production in subsequent months, delegates said. The group meets again on Sept. 5.

After Biden’s trip to Saudi Arabia, US officials had said they were optimistic that Riyadh and Washington were on a path toward reconciliation. During his visit, when he greeted Crown Prince Mohammad bin Salman with a fist bump, the president said he expected further steps from the kingdom in terms of oil production. Late on Tuesday, the US approved the sale of $3.05 billion of weapons including Patriot missiles to the Middle East heavyweight.

OPEC+ had shown some goodwill toward consumers in recent months, fast-tracking the production increases in July and August that completed the reversal of their Covid-era curbs. The Saudis ramped up output to 10.78 million barrels a day last month, according to a Bloomberg survey, a level pumped only on rare occasions.

“We saw that OPEC increased their supply in July and August, quite significantly, and now they’re continuing that,” Amos Hochstein, the State Department’s senior adviser for global energy security, said in an interview in Washington. “At the end of the day, we’re not looking at numbers of barrels, we’re looking at: Are oil prices coming down from their highs?”

There’s been a “remarkable” drop in crude prices in recent months, but the Biden administration wants to see them go even lower, Hochstein said.

Capacity Fears

OPEC+ delegates said before the meeting that they saw no immediate need to replace supplies from coalition member Russia, which have proven robust despite sanctions over its invasion of Ukraine. Opening the taps freely could also have strained relations with Moscow.

“There are uncertainties on the market that need to be taken into account” such as new Covid strains and restrictions on Russian petroleum sales, Deputy Prime Minister Alexander Novak said in an interview with state Rossiya 24 TV. “Therefore, such cautious decisions are taken today.”

Delegates had also said prior to the meeting that the group’s limited reserves of spare production capacity were best kept for later in the year, when crude markets look set to tighten as the US winds down its release of emergency stockpiles. Idle supplies in the Middle East are down to “razor-thin” levels of about 2 million barrels a day, or 2% of world demand, according to the International Energy Agency.

OPEC+ ministers noted in their final communique after Wednesday’s meeting that “the severely limited availability of excess capacity necessitates utilizing it with great caution.”


Related Articles

Saudi Press
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Swedish Embassy in Baghdad Engulfed in Flames Amidst a Firestorm of Protests
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Today, we're unveiling the splendor of one of Saudi Arabia's most exclusive and stunning retreats – the Jeddah Yacht Club
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Muslim Tycoon Asif Aziz Receives Approval for the Transformation of the iconic London Trocadero Landmark into Mosque
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
Israeli Prime Minister Netanyahu Hospitalized Due to Dehydration Amidst Summer Heatwave
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Saudi Arabia Joins the Treaty of Amity and Cooperation in Southeast Asia
The Renowned Crown Prince Camel Festival Set to Return to Taif on Aug. 1
Why Do Tech Executives Support Kennedy Jr.?