OPEC considers phasing out oil production after Biden releases more crude oil

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Top oil producers, Saudi Arabia and Russia, are considering phasing out their planned efforts to boost oil production, according to The Wall Street Journal, after gasoline prices were announced by the US and other energy-saving countries in an attempt to reduce their national strategic petroleum reserves.

The Journal Reported On Wednesday, leaders in Riyadh and Moscow led the 14-member OPEC in coordinating production with other oil-producing countries. Other members of the cartel – such as the United Arab Emirates – are unsure whether such a break is needed, according to the Journal, referring to people familiar with the matter.

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The move comes after President Biden on Tuesday morning ordered the release of 50 million barrels of oil from the country’s Strategic Petroleum Reserve in the hopes of lowering gas prices, a decision made by other countries, including India, the United Kingdom and China.

Saudi Arabia’s Crown Prince Mohammed bin Salman arrived at Kansai Airport in Izumisano City, Osaka Prefecture, on June 27, 2019, before the G20 Osaka Summit. (By Charlie TRIBALLEAU / AFP Getty Images))

Established after the 1973-74 oil embargo by the Arab members of OPEC, Reserves used In the wake of Hurricane Katrina in 2005, after a landslide and the destruction of the Gulf of Mexico oil infrastructure. At the time, the Bush administration authorized US producers to release 20.8 million barrels of crude.

Biden said in White House remarks on Tuesday: “The reality is we are always going to get through those spikes, but hopefully it will get faster. The filling gas drop should be seen. ”

Proponents of releasing barrels from Emergency Stockpile say that doing so would increase oil supplies, reduce prices at the pump, and provide billions in revenue to the federal government. Still, critics say releasing emergency supplies is a short-term solution to the problem and does not actually boost the country’s oil-producing capabilities.

On Thursday, November 19, 2020, an oil pumping jack, also known as “Nodding Donkey”, was found in an oil field near Durtyuli in the Republic of Bashkortostan, Russia. (Andre Rudakov / LOVEBYLIFE via Getty Images / Getty Images)

A gallon of gas was $ 3.41 nationwide Tuesday, according to the AAA – up from $ 2.11 a year ago.

Biden has called on the Federal Trade Commission to investigate Oil and gas Companies have committed criminal behavior by profiting from artificially high prices at the pump, even as wholesale fuel costs have fallen.

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The Washington Saudi-led group of OPEC and Russian-led oil producers have tried to persuade them to open their taps and release more oil, but the two groups who call themselves OPEC + have rejected the push. The groups will meet next week to review the agreement they reached to boost their collective oil production.

The deal includes plans to increase production by 400,000 barrels per day per month from next year, until the group reaches its pre-epidemic level. In 2020, the group implemented drastic cuts as COVID-19 stalled the global economy and as demand evaporated.

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