Saudi Arabia and Russia intend to take a new step to stop the planned monthly increases in oil production, according to Reuters quoted the Wall Street Journal.
OPEC delegates said that this step came to compensate for the new supplies approved by some countries led by the United States, so Riyadh and Moscow are now considering stopping the group’s monthly collective increase.
And the “Wall Street Journal” report revealed, on Wednesday, citing people familiar with the discussions, that the other members of the “OPEC +” group are not convinced of the need for a pause.
Delegates said the United Arab Emirates, a powerful member of the Organization of the Petroleum Exporting Countries (OPEC) that has clashed with Saudi Arabia over OPEC policy in the past, and Kuwait, are resisting pause.
The deal includes, according to the report, plans to raise production by 400,000 barrels per day every month until next year.
This pace would return production to its level before the Corona epidemic, as the group sharply reduced its production in 2020 with the evaporation of demand amid the closures that included several countries.
Oil prices are hovering near multi-year highs.
These steps come at a time when many countries, particularly in Europe, are planning to impose new restrictions that could undermine economic activity.
And the administration of US President Joe Biden announced that it would release millions of barrels of oil from strategic reserves, in coordination with China, India, South Korea, Japan and Britain, in an attempt to curb the rise in prices after OPEC + producers repeatedly ignored calls for more production to counter inflammation in the oil market.
And on Tuesday, Biden stressed that high oil prices “is a problem” around the world, stressing that “it is unacceptable for oil companies to make a difference between wholesale and retail prices.”
He added that coordinated global measures on oil reserves would help deal with supply shortages, but that these measures “will not solve the problem overnight but will make a difference.”
Biden not only ordered the use of 50 million barrels to adjust prices, but did so in coordination with other countries, which is an unprecedented gesture.
The release of millions of barrels of oil, led by the United States, threatens to further scramble the balance of supply and demand,” according to the “Wall Street Journal” report.
Saudi Arabia believes that the released crude may lead to an increase in global supplies and threaten to lower prices, “according to people familiar with the matter,” the report says.
And on Wednesday, China announced that it would use its oil reserves in an effort to lower oil prices, following in the footsteps of Biden’s initiative.
“China, in view of its current needs and conditions, will withdraw from its national stockpile of crude oil and take other necessary measures to maintain market stability,” said Chinese Foreign Ministry spokesman Zhao Lijian.
Zhao did not specify the date of this withdrawal, or the amount of oil that Beijing intends to pump into the market.
Bloomberg reported that President Biden spoke about the initiative last week with his Chinese counterpart, Xi Jinping, during their first video meeting.