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OPEC+ snubs Biden’s diplomacy with ‘minuscule’ oil-output hike

Aug. 3, 2022 Updated Wed., Aug. 3, 2022 at 9:04 p.m.

A gas flame burns on an offshore oil platform in the Persian Gulf's Salman Oil Field near Lavan island, Iran, on Jan. 5. 2017.  (Bloomberg )
A gas flame burns on an offshore oil platform in the Persian Gulf's Salman Oil Field near Lavan island, Iran, on Jan. 5. 2017. (Bloomberg )
By Salma El Wardany </p><p>and Grant Smith Bloomberg

OPEC+ snubbed months of diplomatic efforts from U.S. President Joe Biden with one of the smallest oil production increases in its history.

The cartel will add only 100,000 barrels a day of oil in September, giving a tight market extra supplies at a much slower pace than in recent months despite pressure from the White House to help cool prices.

The 23-nation alliance will divide that amount proportionally between members, and with only the Saudis and the United Arab Emirates able to bolster production, just a fraction of the amount is likely to be delivered.

For July and August, the group had pledged to add more than 600,000 barrels a day to the market.

The increase offers little respite for consumers suffering the inflationary squeeze of high oil prices.

Brent crude erased earlier losses, rising 1.6% to $102.12 a barrel as of 1:52 p.m. in London.

“From a global balance perspective, today’s minuscule quota increase – the smallest since 1986 in absolute terms and smallest ever in percentage terms – is noise,” said Bob McNally, president of Washington-based consultant Rapidan Energy Group and a former White House official.

“Though if pump prices keep falling, the White House will likely claim credit.”

Ministers endorsed the proposal at an online meeting on Wednesday, according to a statement on the OPEC website.

There were no discussions about whether the Organization of Petroleum Exporting Countries and its allies would keep increasing production beyond September, delegates said.

After Biden’s trip to Saudi Arabia, U.S. officials had said they were optimistic that Riyadh and Washington were on a path toward reconciliation.

During his visit, when he greeted Crown Prince Mohammad bin Salman with a fist bump, the president said he expected further steps from the kingdom in terms of oil production.

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