When the US and six countries including South Korea, China, Japan, India and the UK, led by the US administration led the administration of Joe Biden to keep up with the soaring international oil price, major oil producing countries such as Saudi Arabia and Russia are reconsidering plans to increase oil production. While the rise in international oil prices has not been dampened despite the plan to release oil from stockpiles, there are concerns that oil price instability is growing due to counterattacks from oil-producing countries.
On the 24th, the Wall Street Journal (WSJ), citing a source in the US, said, “The largest oil producers, Saudi Arabia and Russia, are considering a plan to halt their recent plans to increase oil production. It was in accordance with the announcement that they would release them.” The media added that the Saudi-led Organization of Petroleum Exporting Countries (OPEC) and OPEC Plus (+), which includes non-OPEC oil producing countries such as Russia, will hold a meeting next week to review the long-term oil production plan announced earlier this year. OPEC+ previously agreed to increase production by 400,000 barrels per day starting in August.
OPEC+ cut production last year as international oil prices fell as oil consumption declined due to the novel coronavirus infection (COVID-19). As international oil prices soared recently due to the economic recovery, the Biden administration decided to release 50 million barrels of strategic oil on the 23rd, but it is not enough to keep up with oil prices. The six countries, including the United States, which have decided to release oil reserves this time, are about 70 million barrels, which is slightly more than half of the world’s daily consumption of crude oil. Concerning the release of stockpiles, experts feared that it could stimulate oil-producing countries and reduce oil supply, but the concern is becoming a reality.
Reporter Byung Moon [email protected]
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