The OPEC+ oil alliance, led by Saudi Arabia and Russia, gave a limited response to Western pressure to increase its extraction, announcing a symbolic increase of only 0,22%, alleging that it already has a “very limited” capacity to pump more crude oil in the short term.
The decision was taken in the first monthly teleconference of the ministers of the sector oil tanker of the 22 member countries of the group after the trip of US President Joe Biden to Saudi Arabia in mid-July.
Biden paid the visit to the world’s biggest exporter of crude in hopes of securing a substantial increase in crude supplies to help bring down prices, which have been triggered by the war in Ukraine and Western sanctions against Russia. .
France, the European Union (EU) and the International Energy Agency (IEA) have also asked OPEC to make more oil available on international markets. is.
As a result, there was speculation in the markets that Saudi Arabia could push for a very limited increase in the supply of ” black” by members of the Organization of Petroleum Exporting Countries (OPEC), the entity she leads. This increase would be similar to those adopted every month since August last year, between 400 thousand and 600 thousand barrels per day.
The Minister of Energy of Kazakhstan, Bolat Akchulakov, shortly before participating in the conference call, expressed support for increasing extractions to prevent the market from overheating.
He claimed that, in the situation current, “a range of US$ 60 to US$ 80 per barrel is acceptable for oil producers ” and viable for the world economy.
But after having recovered this month the pre-pandemic level of extractions only on paper, without reaching it in practice because of the limitations of production capacity of many of its members, the alliance chose today to add only 100 thousand barrels per day in September.
This is the smallest increase in supply in the 62 years of OPEC history and, therefore, is merely symbolic, according to analysts, who do not expect the decision to have any effect on price developments.
The total pumping quota of the countries participating in the limit it (all except Venezuela, Iran and Libya) increased by just 0,22%, to 43,955 million bd.
The “availability “very limited” capacity to pump more crude oil in the short term “requires that it be used very cautiously”, OPEC+ ministers emphasized in their communiqué on the virtual meeting, referring to the so-called “idle capacity”, which is critical to respond to unforeseen supply interruptions.
Experts estimate that, at present, only Saudi Arabia and the United Arab Emirates still have significant idle capacity.
Others countries are already pumping technical capacity to the max, a situation that OPEC+ ministers now attribute to “a chronic lack of investment in the sector”.
They are “particularly concerned” that “underinvestment” will cause problems to meet demand for “black gold” after 2023.
The ministers also acknowledged that raw materials are significantly lower than in the five years prior to the pandemic, and that strategic reserves “have reached their lowest levels in more than 22 years”.
Finally, the ministers again highlighted that they have no intention of abandoning the partnership with Russia, even in the context of the war in Ukraine, emphasizing “the importance” of maintaining the group’s internal “cohesion” .
The next conference call of the OPEC+ ministers is scheduled for September 5th.