The Daily Update: OPEC Accused

Not for the first time in its history, and it will not be the last, OPEC has been branded a cartel and blamed for the 40% increase in petrol prices in the US. The US energy secretary, Jennifer Granholm, said over the weekend ‘Gas prices of course are based on a global oil market. That oil market is controlled by a cartel. That cartel is OPEC’, adding ‘So that cartel has more say about what is going on’. Her boss also got in on the act at the G20 meeting in Rome telling reporters that ‘I do think that the idea that Russia and Saudi Arabia and other major producers are not gonna pump more oil so people can have gasoline to get to and from work for example is not right’. All very much at odds with the White House’s recent reiterite that they are now serious about addressing climate change and that others should now follow its lead. On Monday Biden took aim at those countries not attending the COP26 in Glasgow. ‘More has to be done’ he said, adding ‘But it’s going to require us to continue to focus on what China’s not doing, what Russia’s not doing and what Saudi Arabia is not doing’. All very rich considering US consumers bought nearly 800,000 Ford F series pickup trucks alone in 2020. The US is not the only country that is calling on OPEC to open the taps. The likes of Japan, India and China have also reportedly been trying to pressure the cartel into increasing output. It seems when Putin, one of the linchpins of OPEC+, warned that $100 a barrel was a distinct possibility, the alarm bells really started ringing. However, with Granholm saying ‘Let me just say one thing, these rising fuel prices in fossil fuels tell us why we’ve got to double down on diversifying our fuel supply to go for clean’ would it be any wonder if OPEC were to snub the calls to increase? After years of hearing the ongoing global calls from all quarters to stop new investments in oil companies and producers along with being side-lined in the rush to cut emissions by large industrial economies, it's hardly surprising they might not be ready to play ball. The way OPEC sees it, higher oil prices are essential to continued investment, along with reminding the world that it still needs them. We will learn tomorrow whether OPEC are heeding any of the calls.

Enjoy the day.