Oil exporting countries can only increase the supply of “black gold” on the world market if the world is facing a serious crisis. Analysts suggest this could happen next winter.
The leaders of OPEC (Organization of the Petroleum Exporting Countries) are ready to provide a “significant increase” in oil production. This will happen if the world faces a severe supply crisis as early as this winter, according to Reuters.
“In view of the fact that there may be no gas in Europe this winter, and in the new year there may be a ceiling on Russian oil prices, we can no longer throw every barrel on the market,” said one of the sources .
According to him, Saudi Arabia, UAE and some other OPEC members have reserve production capacity at the level of about 2.0-2.7 million barrels per day.
“The only time we can prove we have more spare capacity is when it comes to a prolonged crisis,” he said.
The source added, this will happen when the production of OPEC members increases. In particular, such a choice is already possible this winter, because the political and economic confrontation between Russia and the West against the background of the invasion of Ukraine shows no signs of weakening.
Russia’s attack on Ukraine has sent gas prices in Europe to record highs and world prices for Brent oil to a 14-year high.
Analysts believe that OPEC + sees no point in adding oil to a falling market. However, after US President Biden visited Saudi Arabia in July to demand more oil to cool international markets, analysts speculated that OPEC+ would increase supply.
The decision to increase production by 100 thousand barrels per day, taken on Wednesday, August 3, is one of the lowest since OPEC quotas were introduced in 1982. However, it is a gesture of goodwill, the source of the notes and added that OPEC + has reached a consensus.
Recall that the Western media reported that Russia had found a new way to deliver its oil to the market under Western sanctions. The oil is mixed in an Egyptian port, making it difficult to track the cargo’s final destination.
In addition, the G7 countries intend to impose restrictions on the cost of Russian oil at the beginning of winter.
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Source: korrespondent
I am David Wyatt, a professional writer and journalist for Buna Times. I specialize in the world section of news coverage, where I bring to light stories and issues that affect us globally. As a graduate of Journalism, I have always had the passion to spread knowledge through writing.