The United Arab Emirates recently stated that it supported increasing the production of oil. This resulted in the plunge in oil prices. UAE’s statement resulted in a 17% fall of an international benchmark, Brent Crude. Brent crude is a member of Opec, a powerful oil cartel.
The fall followed weeks of the plunge in oil prices due to supply disruptions that resulted from Russia’s invasion of Ukraine. The constantly rising prices have narrowed down families all around the world financially.
US President, Joe Biden and other world leaders have been putting efforts to control the price tension for households. Many US officials have been talking with oil producers aimed at boosting supply.
The UAE Embassy in Washington tweeted a statement by Ambassador Yousuf Al Otaiba. The statement quoted that they favor production increases and will encourage Opec to consider high production levels.
The pandemic already saw the demand for oil collapsing. A rebound in demand saw a rise as energy prices started soaring for a year now. In addition, the invasion of Ukraine by Russia added new pressures to energy prices. Sanctions imposed by countries around the world have made it difficult for the nation that produces 7% of global supplies to find buyers for its oil.
Countries like the US, Canada, and the UK imposed bans on Russian oil imports. The UK asserted that it would phase out oil imports from Russia by year-end.
Since 24 Feb, oil prices have leaped to more than 30%, touching $319 (105 Pounds) at one point this week. And the market saw Oil prices settling down at about 12% at about $112, a barrel.
The International Energy Agency (IEA) has announced that 60 million barrels of oil from strategic national reserves would be released. On Wednesday, the agency also stated that the oil reservoir may be tapped further. As part of the answer, Fatih Birol, the IEA's Executive Director, emphasized that if there is a need and the government determines so, they can deliver extra oil to the markets.
The UAE statement follows one week after Opec rebuffed calls to increase production levels that stated that it would stick to an earlier plan to gradually increase output.
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