FRANKFURT, Germany (AP) — OPEC and allied oil-producing countries rebuffed pressure from President Biden to pump significantly more oil and lower gasoline prices for American drivers, deciding Thursday to stick with their plan for cautious monthly increases even as prices surge and the global economy is thirsty for fuel.
The OPEC+ alliance, made up of OPEC members led by Saudi Arabia and nonmembers led by Russia, approved an increase in production of 400,000 barrels per day for the month of December during an online meeting.
That is in line with the group’s road map to add that amount of oil to the market every month into next year. The plan is to open the petroleum taps bit by bit — even as oil prices have surged to seven-year highs — until deep production cuts made during the coronavirus pandemic are reversed.
That hasn’t gone down well with Biden, who has made repeated calls for OPEC+ to pump more oil. The U.S. used the Group of 20 summit last weekend in Rome to consult with other oil-consuming countries on how to exert influence over the producing countries and what they might do if the Saudis and Russians continue to hold back.
“Our view is that the global recovery should not be imperiled by a mismatch between supply and demand,” a White House National Security Council statement said Thursday. “OPEC+ seems unwilling to use the capacity and power it has now at this critical moment of global recovery for countries around the world.”
Saudi Energy Minister Prince Abdulaziz bin Salman said member countries were “underscoring their commitment to market stability.”
He said OPEC+ was serving as a responsible market “regulator,” comparing the relative stability of the oil market to the wild swings in prices for natural gas, which have risen to more than five times what they were at the start of the year amid a global fossil fuel crunch.
“Markets need to be regulated, or things may go astray as we have been seeing over the past four months,” he said at a news conference.
The caution from OPEC+ means higher oil prices worldwide and more revenue for producing countries. Slower increases also mean less risk of increasing production too quickly and of sending prices suddenly lower as the group braces for the possibility of more economic turbulence from COVID-19 outbreaks this winter or from supply chain backups, labor shortages and rising consumer prices that have threatened the global recovery.
U.S. oil prices eased somewhat this week after hitting their highest level since 2014. Oil traded up 0.6%, to $81.39 per barrel, on the New York Mercantile Exchange after the OPEC+ decision, down from its recent peak of over $85 per barrel last week.