Saudi Arabia, Russia, and OPEC have all refused to increase oil production, despite calls from U.S. President Donald Trump to do so. This has led to a four-year high for oil prices, exceeding $81 per barrel.
High Oil Prices
Brent crude oil has reached its highest price since November 2014, reaching $81.16 per barrel and spiking 3% in a single day of trading. OPEC, an organization made up of 15 nations that produces approximately 44% of global oil production, is generally led by Saudi Arabia. Russia is the largest oil-exporting nation outside of this group.
Representatives from OPEC and Russia met in Algiers on Sunday to discuss current levels of oil production, President Trump’s appeals for greater production, and the current state of global oil supplies. Despite OPEC initially discussing theoretically increasing output by up to 500,000 barrels per day, the meeting ended with no plans to increase production rates at this point in time.
However, it seems likely that the price of oil will only increase in the near future. Sales of Iranian crude oil have fallen dramatically due to the implementation of global sanctions, and reduced supply of oil along with increasing demand will only lead to increased prices. Commodity trading specialists Trafigura and Mercuria predict prices could exceed $100 per barrel by the beginning of 2019, which would have significant impacts on governments, businesses, and the public, with energy prices and petrol all subsequently increasing in price.
President Trump recently tweeted that OPEC must seek to “get prices down now!” implying that they should increase global output. However, OPEC, with support from Russia, seems to have different plans.