US Urges Opec to Boost Production to Curb Rising Fuel Prices

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The White House has called on Opec to boost oil production in an effort to curb high petrol prices, Financial Times reports.

Biden administration said higher pump price threaten ongoing global economic recovery

Petrol is selling for an average of $3.19 a gallon across the US, up almost 50% from the same time last year, according to the AAA, an automobile association.

The highest recorded national average price was more than $4.10 a gallon, in 2008.

Joe Biden’s national security adviser, Jake Sullivan, said in a statement today that while Opec and its allies had “recently agreed to production increases”, the boost would “not fully offset previous production cuts that Opec+ imposed during the pandemic until well into 2022”.

“At a critical moment in the global recovery, this is simply not enough,” added Sullivan, saying that the US was “engaging with relevant Opec+ members on the importance of competitive markets in setting prices”.

US petrol prices have risen alongside soaring motor fuel demand as the American economy has reopened following coronavirus-related lockdowns.

International oil prices softened about 1 per cent after the announcement, with Brent trading just under $70 a barrel and West Texas Intermediate, the US benchmark, at about $67.50.

The Opec cuts and vaccine breakthroughs at the end of last year helped oil prices rally to more than $70 a barrel, although analysts are increasingly concerned that a coronavirus resurgence could hamper global oil demand. 

The Opec+ group, including the United Arab Emirates, Saudi Arabia, Russia, Iraq and Kuwait, last month agreed to raise production by about 2m barrels a day, or more than 2 per cent of global demand, to the end of 2021, and restore all the supplies it cut last year by the end of 2022.

Opec declined to comment on Sullivan’s statement.

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