OPEC+ has not yet discussed President Biden's call on the cartel to increase oil production in a bid to reduce prices at the pump for American drivers, Russian Sputnik reported, citing an unnamed source from one of the group's delegations.
The White House earlier this week appealed to OPEC+ to raise oil production by more than the cartel had planned as prices of gasoline continued up driven by demand and tight supply.
"We are engaging with relevant OPEC+ members on the importance of competitive markets in setting prices," U.S. National Security Advisor Jake Sullivan said on Wednesday in a statement.
"Competitive energy markets will ensure reliable and stable energy supplies, and OPEC+ must do more to support the recovery," Sullivan added, in what was one of the first direct calls from the Biden administration on the OPEC+ alliance. "Higher gasoline costs, if left unchecked, risk harming the ongoing global recovery," he added.
"There have been no discussions between the members of the alliance on this issue yet. They [discussions] are constantly conducted on various issues informally when unforeseen events in the oil market occur," the Sputnik source said. However, they added that a discussion could not be ruled out.
The move by the White House is a bit surprising, given its strictly green agenda and the prioritization of alternative sources of energy over oil. Yet prices at the pump have been rising for months now, with the average so far this month at $3.12 per gallon, earlier hitting a one-year high of $3.19 per gallon. Washington expects this to fall to $2.82 per gallon in the final quarter of the year. Rising Covid-19 infections could contribute to the price decline, according to Bloomberg.
OPEC+ meanwhile is adding 400,000 bpd to its collective production from this month onwards until late 2022, when its production will reach pre-pandemic levels. According to Washington, this is not enough. Yet given Biden's green agenda and the higher oil prices that the production curbs have resulted in, it is questionable how favorably OPEC+ will look on the call.
By Irina Slav for Oilprice.com
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As a matter of routine, OPEC+ assesses conditions in the market regularly to ensure that they don’t tip the market to deficit or glut.
And while OPEC+ will note President Biden’s call, any action it may take will be initiated by conditions in the market. It is neither OPEC+’s job nor its intention to ensure that US gasoline prices don’t go high.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London