Bring down oil prices, OPEC told

PARIS: The head of the International Energy Agency (IEA) on Wednesday (Thursday in Manila) called on the Organization of the Petroleum Exporting Countries (OPEC) and its allies to take measures to help bring oil prices down to “reasonable levels.”

“I very much hope to see in the next meeting or meetings they… make the necessary steps in order to comfort the global oil markets and help bring the prices down at reasonable levels,” Fatih Birol told reporters.

The head of the IEA, which unites oil consuming nations, also took aim at Russia over gas.

“Russia can easily increase exports to Europe about 15 percent… and significantly comfort the European gas markets,” said Birol.

Natural gas prices in Europe have surged this year and Russia, the region’s major supplier, has been slow to step up deliveries.

OPEC nations and their allies, including Russia, agreed in July to slowly increase their oil output each month toward pre-pandemic levels as the world economy recovers from the Covid-19 pandemic.

They have declined to move faster despite a jump in prices to over $80 per barrel, a level that many analysts worry could undermine the global economic recovery. They are due to review their strategy at a meeting in December.

The United States and a handful of other oil consuming nations announced on Tuesday releases of supplies from their strategic petroleum reserves.

The move is aimed at blunting soaring prices at the pump that are biting into consumers’ pocketbooks and pushing up transportation costs.

“The rise in oil prices is placing a burden on consumers in these countries and also in several emerging countries,” Birol said.

“It also puts additional pressure on inflation in a period where economic recovery remains uneven and still faces a number of risks,” he added.

Inflation is pushing central banks toward raising interest rates, a move which would slow the global economic recovery as well as dent oil demand.

Global crude prices rose following the announcement of the releases from strategic reserves as the move was less ambitious than anticipated.

Birol added the releases were not a collective response by IEA members, which he said have happened only three times due to major supply shocks like the 1991 Gulf War, Hurricane “Katrina” and the Libyan civil war.