OPEC and Russia will consider oil production under pressure from Biden.
With new climate pressures looming, OPEC countries may prefer to reap high incomes, build up their financial reserves, and raise funds to invest in solar and wind power and other businesses that could eventually replace oil. .
OPEC and its allies may also have less leeway to increase production than one thinks. The group is not meeting its overall target and some members, like Angola and Nigeria, are said to have already peaked, while others, like Russia, may not be far away. It is not in the interest of countries unable to increase production for the Saudis and others to increase production, lowering prices and lower incomes.
In addition, OPEC members and its allies do not see the current oil market in need of repair. As OPEC officials note, the natural gas and electricity markets, which are outside their jurisdiction, have been extremely volatile in recent weeks. Oil prices have increased more gradually.
“People need to copy and paste what OPEC Plus has done and what it has achieved,” Saudi Oil Minister Prince Abdulaziz bin Salman said at an energy conference in Russia this month. last, according to Reuters.
Whatever OPEC Plus does, it is unlikely to have an immediate effect on the world’s thirst for oil.
Over the next few months, demand for oil, which remains the world’s largest source of energy, is expected to continue growing, as the global economy continues to recover, forecasters say. Supply, however, may not keep pace, in part because oil companies and investors are reluctant to invest in what may be a dying business.
The result could be a bumpy transition.
“If you cut supply faster as demand moves away from fossil fuels, you’ll get high and volatile prices,” Mr. Bronze said.