Disagreement between the United States and OPEC + on the recovery of the oil market

White House worries about black gold prices, which are fueling inflation and exasperating American motorists in the midst of driving season. President Biden’s national security adviser informed the leaders of OPEC +, the cartel of the Organization of the Petroleum Exporting Countries and ten other nations led by Russia, which assures more than half of world production.

Jake Sullivan estimated that OPEC + does not ” not enough ” to relax the market “At a critical time for global recovery”. “The rise in gasoline costs, if left unchecked, could harm the current recovery”, he warns. On Wednesday, the brent listed in London, the world benchmark, reached $ 71.44 (60.85 euros) for deliveries in October (+ 1.14%), while the west texas intermediate for delivery in September gained 1, 40% in New York (at $ 69.25).

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” Not enough “, this means that the decision taken on July 18 by OPEC + to put an additional 400,000 barrels on the market each month between August and December, i.e. 2 million more at the end of 2021, would be insufficient to meet growing demand, especially across the Atlantic. In April 2020, the cartel drastically tightened the floodgates: – 10 million barrels per day, or 10% of world production, which had reached 100 million barrels before the pandemic. He does not envisage a return to the pre-Covid production level before the end of 2022.

Declining forecasts

OPEC has good reasons to manage its offer as accurately as possible, especially as a barrel at 70 dollars does not compromise the recovery. In fact, the Delta variant of SARS-CoV-2 is spreading across the world, especially in large economies, such as the United States, China and Europe: this resurgence of the pandemic risks causing the return of severe confinements, which would drop the demand for crude. In its monthly report, published Thursday, August 12, OPEC warns that “Uncertain outlook” always call for “Determined efforts” of its members and allies.

For OPEC, these are factors specific to the United States that explain the current surge at the pump

On the same day, the International Energy Agency (IEA) confirmed this risk of falling demand in its own monthly report. She has “Strongly” reduced its demand forecast (-550,000 barrels) for the rest of the year, a complete reversal from its estimate in mid-July. Like the Biden administration, the IEA at the time urged OPEC + to reopen the tap to avoid a price spike that was damaging to the economy. Since then, the rebound in demand has faltered and non-OPEC + countries have increased their production. They will continue in 2022 (+ 1.1 million barrels per day), explains the IEA, which expects surpluses.

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