OPEC agrees to increase production marginally despite heavy pressure fro

Vienna: OPEC+, an organisation of petroleum export countries, has a meeting to agree on increasing oil production from September by 100000 barrels per day. In the last session, for July and August, OPEC + decided to increase oil production by 600000 barrels per day. Hence the latest increase planned for September is relatively minimal compared to the last. The reason cited was the lack of energy resources to produce an excess oil capacity. Analysts claim that OPEC does not want to increase production to a large extent to maintain the balance and avoid conflict with Russia, the leading oil producer.

Due to the Russia-Ukraine conflict, the global fuel demand-supply has been disturbed. Meanwhile, Russia has warned to stall oil and gas supply if the West continues to impose sanctions. If Russia stops the supply, the demand gap could shoot the price of oil in the range of $200-$300 per barrel. Considering this possibility, the Western countries have appealed to OPEC to pump more oil production. US President Joe Biden was leading this initiative. During his visit to Saudi Arabia, there were reports that Saudi had agreed to increase production. Other Gulf and African countries also pledged to increase oil production. However, during the Wednesday OPEC meeting, it was decided to increase the production marginally. Fuel prices have shot up in the US and European countries, which are driving the inflation index up. Citizens have started to feel disheartened due to higher costs. Some analysts are expressing fear of strong political repercussions.

The United States, Europe, and other Western countries have imposed massive sanctions on Russia. European countries have also announced plans to substitute Russian fuel imports in the next few years. However, they do not have immediate action plans to reduce the energy cost and ensure energy security. Alternate sources of energy suppliers would be the Gulf and African countries. However, the OPEC meeting held on Wednesday has not yielded a favourable outcome for European countries.