China, the world’s largest crude importer, is non-committal about its intentions to release oil from its reserves on a request from the United States, while OPEC producers were not mulling changing tactics in light of the U.S. action.
- U.S. President Joe Biden’s administration announced plans to release millions of barrels of oil from strategic reserves in coordination with other large consuming nations, including China, Japan and India, to try to cool prices.
- U.S. gasoline prices are up more than 60% in the last year, the fastest increase since 2000.
- Washington’s move raised speculation that the Organization of the Petroleum Exporting Countries and allies, collectively known as OPEC+, might consider pausing its current agreement to boost output by 4,00,000 barrels per day every month, but the group is not considering that.
- Opec+ refers to the alliance of crude producers, who have been undertaking corrections in supply in the oil markets since 2017.
- OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan.
What is OPEC?
- The Organization of the Petroleum Exporting Countries (OPEC) was founded in Baghdad, Iraq, with the signing of an agreement in September 1960 by five countries namely Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia and Venezuela.
- They were to become the Founder Members of the Organization.
- OPEC is a permanent, intergovernmental organization.
- OPEC’s objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry.
- It is headquartered in Vienna, Austria.
- OPEC membership is open to any country that is a substantial exporter of oil and which shares the ideals of the organization.