Saudi Arabia, Russia and OPEC have all refused to increase oil production, despite calls from U.S. President Donald Trump’s calls to increase volume.
This has led to a four-year oil price high of over $81 per barrel.
Oil Price Highs
Brent crude oil has reached it’s highest price since November 2014, peaking at $81.16 per barrel, spiking 3% in a single day’s trading on one occasion.
OPEC, the Organisation of the Petroleum Exporting Countries, which is made up of 15 nations, produce an approximate 44% of global oil production. OPEC is generally led by Saudi Arabia. Russia is the largest oil exporting nation outside of this group.
Both representatives from OPEC and Russia met in Algiers on Sunday to discuss current levels of oil production. They also debated President Trump’s appeals for greater production, and the current state of global oil supplies.
The meeting ended with no plans to increase production rates at this point in time, despite OPEC initially discussing theoretically increasing the output by up to 500,000 barrel per day.
However, the price of oil looks likely to only increase in the near future.
Sales of Iranian crude oil have fallen dramatically, due to the penalties of sanctions implemented globally. As such, the reduced supply of oil, along with the ever-increasing demand, will only lead to increased prices.
Commodity trading specialists Trafigura and Mercuria predict that prices could exceed $100 per barrel by the beginning of 2019.
Obviously, this would have significant impacts on all aspects of daily life for governments, businesses and the public, with everything from energy prices to petrol all subsequently increasing in price.
Earlier this week President Trump tweeted that OPEC must seek to ‘get prices down now!’, implying that they should increase global output.
However, OPEC, along with support from Russia, seem to want to follow different plans. When oil fell below $50 per barrel in 2016, OPEC and Russia agreed to monitor global output to ensure that prices would remain stable for those who produce oil, and Sunday’s discussions seem to want to uphold this agreement.
For the moment at least, it seems that oil prices are set to continue to rise.