Photo used for illustrative purpose.
The Opec oil cartel and its allies decided on Wednesday to boost production in September by a much slower pace than in previous months at a time of high gasoline prices and unstable energy supplies exacerbated by Russia’s war in Ukraine.
Opec, led by Saudi Arabia, and its allies, led by Russia, said they will increase output to 100,000 barrels a day next month after raising it by 648,000 barrels per day in July and August.
Some Opec nations, such as Angola and Nigeria, have been producing less than the agreed-upon amount. Saudi Arabia and United Arab Emirates, on the other hand, have the capacity to increase production.
Russia’s oil and natural gas exports to the world have declined as many nations imposed sanctions or curtailed buying from the major supplier due to its invasion of Ukraine. Russia also has reduced or cut off natural gas to a dozen European countries, further driving up energy prices, squeezing people’s spending power and threatening to cause a recession if nations can’t stockpile enough natural gas to get through the winter.
It was the first official monthly meeting of the Opec+ group since its leader, Mohammad Sanusi Barkindo, died at age 63 in his home country of Nigeria last month. Haitham Al Ghais, a veteran of the Kuwait Petroleum Corporation, took over as secretary general of Opec this week.
It was also Opec’s first meeting since US President Joe Biden visited Saudi Arabia last month, aiming to improve relations and hoping to encourage more oil production from the cartel. There was no oil production agreement announced after the meeting, but Biden said he expected OPEC to take steps to increase production in the coming weeks.
In the US, a gallon of regular gasoline was selling for $4.16 on average on Wednesday. That’s substantially lower than in June, when the nationwide average surpassed $5 a gallon, but it’s still painfully high for many front-line workers and families to afford and about 31% higher than what drivers were paying a year ago.