OPEC, Russia won’t change target output

Officials from OPEC, Russia and other oil-producing nations shook off pressure from the Biden administration and decided Thursday to stick with their previous plan to raise oil production by a modest 400,000 barrels a day next month.

President Joe Biden and other world leaders have called on countries such as Saudi Arabia and the United Arab Emirates to increase production because oil prices, which collapsed during last year’s pandemic lockdowns, have now reached their highest levels in seven years. Gasoline prices, too, have jumped in the United States, Britain and elsewhere.

The jump in prices, Biden said Tuesday, “is a consequence of, thus far, the refusal of Russia or the OPEC nations to pump more oil.”

But on Thursday, there was no change of heart at the monthly meeting of the OPEC+ alliance, the group of 23 oil-producing nations led by Saudi Arabia and Russia.

The group said it was committed to ensuring “a stable and balanced oil market,” and officials stressed that they have been responsible stewards of the oil market, carefully matching output to rising demand.

And they pointed the finger at other energy markets — including natural gas and electricity, both of which have seen prices rocket in recent weeks — accusing them of “extreme volatility and instability.”

Prince Abdulaziz bin Salman, the Saudi oil minister who led the meeting, displayed a chart showing that since the beginning of

March the prices of natural gas in Europe have approximately quintupled while Brent crude oil, the international benchmark, is up by only about onethird.

“Oil is not the problem,” he said.

The prince’s point, said Bhushan Bahree, an executive director at IHS Markit, a research firm, was that “OPEC+ is managing oil better than other sources of energy are being managed. So don’t be critical of us.”

Bahree noted that although Saudi Arabia had returned its oil production to prepandemic levels, the output of the United States, the world’s largest oil producer, is still well below what it was before the virus hit.

Biden has raised the possibility of tapping the United States’ strategic petroleum reserve to increase oil supplies modestly as a means to control prices. Analysts, though, say that such a move would provide only temporary relief.

The strength of the demand for energy also was questioned. Alexander Novak, Russia’s deputy prime minister, said that there were signs of demand weakening in Europe, meaning that the effects of the pandemic are not over.

Oil futures fell toward the end of Thursday’s trading session, with Brent crude down 1.8% at about $80.50 a barrel and West Texas Intermediate 2.4% lower, at $78.85 a barrel.

The oil producers, though, have several reasons for not wanting to change their plans. Their current agreement, calling for increases of 400,000 barrels a day each month, was the result of bruising negotiations in July.