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OPEC + agrees to stick to the oil production plan and defies US pressure

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An Emirati man stands in front of a pipeline at the Fujairah oil terminal during the inauguration ceremony of a dock for supertankers on September 21, 2016.

Karim Sahib | AFP | Getty Images

OPEC and its oil-producing allies have agreed to continue their current production plan and have decided not to ease the tap amid multi-year highs in crude oil prices and US pressure to cool the market.

The group, known as OPEC +, will extend its August program to gradually increase oil production by 400,000 barrels a day each month.

Russian Energy Minister Alexander Novak said at a press conference on Thursday: “Previously, the decision was made to increase production by 400,000 (barrels per day) every month and I underline every month until the end of 2022. Today the decision was reiterated, the current one Withstand parameters that were previously set. “

When asked why the group did not increase its production volumes despite complaints and inquiries from oil consumers like the US, India and Japan, Novak replied that OPEC and its allies are maintaining market equilibrium and being wary of potential changes in demand.

“From August to date we’ve added 2 million barrels of extra production to the market,” Novak said. “So, as planned, we are adding volume to the market as it recovers, but at the same time we are seeing a seasonal decline in demand in the fourth and first quarters of the year, and there are also some signs” such as a decline in demand for oil products in the EU in October that we watched. ”

This underlines “fundamentally the fact that global oil demand is still under pressure due to the Delta Covid variant and the retention of various restrictions and Covid measures in some countries,” the minister added.

Oil prices recently hit their highest level since 2014 and crude oil importing countries are feeling the pain.

President Joe Biden clearly blamed OPEC + ‘s reluctance to produce more oil to be responsible for the sharp rise in energy prices in the US and around the world.

“The idea that Russia and Saudi Arabia and other large producers will no longer pump oil so that people have gasoline to get to and from work, for example, is incorrect,” Biden said at the G20 meeting on Sunday in Rome .

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