The Organization of the Petroleum Exporting Countries (OPEC) and it’s crude producing allies agreed to maintain their current production plan, despite calls from the United States to increase their output to cool global energy markets.
CNBC reported that at a meeting on Thursday, Nov. 4, the group, collectively known as OPEC+, decided to roll over its August program to gradually increase oil output by 400,000 barrels per day per month from December.
“The decision was made previously to increase production by 400,000 (barrels per day) every month, and I underscore every month, until the end of 2022. Today the decision was reiterated to maintain current parameters which were decided on earlier,” Russian Energy Minister Alexander Novak said at a news conference on Thursday.
When asked why the group did not increase its output despite complaints and requests from oil consumers such as the U.S., India, and Japan, Novak said that the group wants to maintain market balance and remains wary of potential changes in demand.
Novak said the group added 2 million barrels of additional production to the market from August until now.
“So as planned, we are giving the market more and more volume, as it is recovering. At the same time we also see there is a seasonal drop in demand in the fourth and first quarters of the year, and also there are some signs such as a decrease in oil product demand in the EU in October, which we have observed,” the minister said.
In August, OPEC + experts forecast that the growth in crude oil demand in 2022 would reach 4.2 million barrels per day, up from the previous forecast of 3.28 million barrels per day.
“There are some signs of decreased oil demand in the European Union in October. Global oil demand is still under pressure from the Delta COVID variant, and due to the preservation of various limitations and COVID measures in some countries,” Novak said, explaining why OPEC+ has chosen not to add more barrels.
The group’s decision comes days after President Joe Biden called on major G20 energy-producing countries to ramp up production to ensure a stronger global economic recovery. He also frankly blamed OPEC+ for their reluctance to pump more oil amid a sharp rise in energy prices in the world markets.
“The idea that Russia and Saudi Arabia and other major producers are not going to pump more oil so people can have gasoline to get to and from work, for example, is not right,” Biden said at the G-20 meeting in Rome on Sunday.
However, OPEC+ sources said that the United States has plenty of capacity to raise its own output if it believes the world’s economy needs more energy, according to Reuters.
In fact, the United States became an energy-independent country under former President Donald Trump, but its production has declined steeply since Biden’s executive orders have curtailed American energy production.
After the group dismissed calls for speedier oil supply increases, the White House said Washington would consider a full range of tools at its disposal to guarantee access to affordable energy.