The consortium of the world’s largest oil-producing countries agreed to boost fossil fuel production faster than expected Thursday as energy prices rise worldwide due to Russia’s drawn-out war in Ukraine.
The member nations of OPEC+ announced the group would add 648,000 barrels per day in July and August, a modest acceleration of plans that were already in motion to reverse drawdowns related to the pandemic. The boost in production came amid pressure from the White House for OPEC+ to do more to fill the gap created by sanctions on Russia.
But while the White House touted the move as a positive step for global energy security, it is unlikely to provide much relief at the pump. Gas prices jumped to another record high Thursday, averaging $4.71 per gallon nationwide, according to AAA.
In April 2020, OPEC+ pulled 10 million barrels of fuel per day from the market and has slowly added capacity back as energy demand increases worldwide.
Oil prices had initially slackened on news OPEC+ was poised to boost production. But West Texas Intermediate crude futures, the U.S. oil benchmark, crept back up and were trading at nearly $117 a barrel shortly after the announcement, roughly the same price as Wednesday. Brent crude, the international benchmark, also bounced back to its Wednesday price.
OPEC+ ministers “highlighted the importance of stable and balanced markets for both crude oil and refined products,” according to a brief readout of the results of Thursday’s meeting.
Energy markets have been anything but stable lately. Even before Russia’s invasion of Ukraine, inflation was pushing oil prices up worldwide. Since the Kremlin launched its attack Feb. 24, Brent crude has risen 17 percent.
International leaders have lobbied OPEC+ nations, which include the 13 countries of the original OPEC and 10 unaffiliated oil-exporting allies, to ramp up production to steady the market, but the group — led most vocally by Saudi Arabia — had said it hadn’t yet seen true shortages.
OPEC+ is in a politically precarious place as it balances pressure to increase production with its alliance with Russia, a member country. The agreement reached Thursday enables the consortium to pronounce it is making moves to ease pressure on world oil markets without ramping up production so much that it undermines Russia.