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Your problem isn’t our problem was the harsh message delivered by OPEC+ on Thursday at a post-OPEC+ meeting presser.
Referring to the energy crisis soaring energy costs, Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman argued that “oil is not the problem”.
Indeed, the energy crisis began with a natural gas crisis that eventually spilled over into coal before snowballing into fertilizer, food, and various other crises as it spread to Asia and throughout the globe.
The Saudi Prince offered the market a solution: focus on the supply of natural gas to Europe and Asia—where the problem originated. This would include the infrastructure that brings the supplies to market.
Some would look at the soaring crude oil and gasoline prices and argue that crude oil is in crisis mode as well. But according to Prince Abdulaziz bin Salman, the double-digit increases in crude oil prices are nothing compared to the triple-digit increases in the price of natural gas and coal.
Today, the OPEC+ group flatly ignored President Biden and the White House’s pleas for more crude production when it lived up to most industry expectations by sticking to its plan to add in another 400,000 bpd of crude production next month.
In retaliation, the White House said it would use whatever tools it had at its disposal to address the energy markets, and lashed out specifically at OPEC+ by saying the group’s inaction implied that it seems “unwilling to use its power to help global economic recovery.”
This has become the mantra of the heaviest oil-consuming countries that have felt the sting of those double-digit price increases, including Japan and India.
But OPEC is still advising caution lest production get too far ahead of demand. “We are not out of the woods yet” Saudi’s Energy Minister said on Bloomberg Television last week.
The United States, Japan, and India would disagree.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group.