VIENNA: Russia’s energy minister said Friday that he was in favor of continuing cooperation with OPEC as their joint accord to cap output bears fruit in boosting the price of crude.
However Alexander Novak said that it was too early to discuss extending or altering the landmark 2016 deal by 24 countries — including Russia and members of OPEC — that expires on March 31.
“We should keep the pace and definitely moreover follow through on the concerted action,” Novak said at a meeting at OPEC headquarters in Vienna of a committee reviewing implementation of the agreement.
He added that while it oil producers should “elaborate a strategy” for April 2018 onwards and that prolonging it was “an option”, it was premature to make a decision now.
“I believe that January is the earliest date when we can actually credibly speak about that state of the market and about how the situation is developing,” Novak told a news conference after the meeting.
“I don’t think it’s right for people to expect us to make a decision seven months before the deal expires,” he said.
Before the pact was reached, a global oil glut saw crude prices plummet from over $100 a barrel in 2014 to a 13-year low of under $30 last year.
The price of oil has seesawed considerably in the last six months, but this week has traded around the $50-per-barrel level, suggesting that the agreement was finally bearing fruit.
Brent crude, the international benchmark, closed at $56.43 a barrel on Thursday, its highest since February and up 25 percent since June. It inched up further on Friday as did West Texas Intermediate.
“We have every reason to be pleased with the steady progress we have made in our collective efforts to overcome the challenges of the current oil market cycle, which is perhaps the worst of all the previous cycles that we have witnessed in recent times,” OPEC’s secretary general Mohammed Barkindo said at the talks.
Recent market data showing a reduction in stocks of oil around the world that has depressed oil prices “confirm beyond all reasonable doubt ... that the market rebalancing is on course,” the Nigerian said.
“OPEC members are trying to target a figure of close to $60 a barrel. We’re not too far away from that,” Emmanuel Ibe Kachikwu, Nigeria’s minister for petroleum resources, told Bloomberg.
“If we get to March (when the deal expires) and find that there’s a need to do more, I think we will.”
The danger, however, is that higher crude prices could entice shale oil producers in the US — outside the deal — to ramp up output and put the market back in surplus.
Russia keen on more OPEC cooperation on oil output cap
Russia keen on more OPEC cooperation on oil output cap
US pump prices surge as Iran war upends global energy supply
- Fuel prices jump over 10 percent as oil prices surge
- Analysts predict further price rises due to market conditions
MARIETTA/NEW YORK : US retail gasoline and diesel prices are soaring as the US-Israel war with Iran constrains oil and fuel exports, which could be a political test for President Donald Trump’s Republican Party ahead of midterm elections in November.
Fuel prices jumped more than 10 percent this week as oil rose above $90 a barrel, its highest in years, adding pain at the pump for consumers already strained by inflation.
Trump on Thursday shrugged off higher gasoline prices in an interview with Reuters, saying “if they rise, they rise.”
The president had vowed to lower energy prices and unleash US oil and gas drilling during his second term, but much of his tenure has been marked by volatility and uncertainty amid shifts in policies like tariffs and geopolitical turmoil.
The US is the world’s largest oil producer. It is a major exporter but also imports millions of barrels a day since it is the world’s largest oil consumer.
As of Friday, the national average prices for regular gasoline stood at $3.32 a gallon, up 11 percent from a week ago and the highest since September 2024, according to data from the motorists association AAA. Diesel was at $4.33, up 15 percent from a week ago, surging to the highest since November 2023.
Midwest, south feel the pinch
US motorists in parts of the Midwest and the South, including states that supported Trump, have seen some of the steepest increases in fuel costs since the conflict in Iran started.
In Georgia, a swing state, average retail gasoline prices rose 40.1 cents a gallon over the past week, according to fuel tracking site GasBuddy.
Andrenna McDaniel, a health care insurance worker in South Fulton, Georgia, said she was surprised to see prices skyrocket overnight.
“They jumped up so quickly,” she said on Friday, adding that she does not agree with the war at all.
McDaniel, a Democrat, said that for now she is only driving for the most important things, and feels lucky that she works from home so she does not have to drive as much as other people do. Georgia voted for Donald Trump in the 2024 election.
Trump voter Richard Soule, 69, a US Air Force veteran and a retired firefighter, said a little pain at the pump is worth Trump’s efforts to protect America.
“When President Trump went in there and bombed out their nuclear, and they just thumbed their nose at it, I believe he did the right thing at the right time,” Soule said on Friday as he filled up his Ford F-150 truck in Marietta, Georgia.
Other states, including Indiana and West Virginia have seen prices rise by 44.3 cents and 43.9 cents, respectively.
Prices may rise further
More pain may be on the way, analysts said, as oil prices continue to trend upward. On Friday, US oil futures settled at $90.90 a barrel, up nearly $10 and the biggest single-day rise since April 2020.
“Given current market conditions, the national average price of gasoline could climb toward $3.50 to $3.70 per gallon in the coming days if oil continues rising and supply disruptions persist,” GasBuddy analyst Patrick De Haan said.
The disruptions in the Middle East and the Strait of Hormuz, a key trade conduit, have boosted demand for US oil abroad, which in turn has driven up prices for domestic refiners too.
“The US has weaned itself off of its dependence on Middle Eastern crude, but obviously Asian refineries, and to a lesser extent, European refineries have not,” Denton Cinquegrana, chief oil analyst with OPIS. “That’s what you’re seeing happen in the spot market, because the demand for US exports rise, and so the price rise.”
Seasonal factors could add further pressure. Gasoline prices typically go up in the spring and peak in the summer due to higher gasoline demand and production of summer-blend gasoline, which is more costly to produce. Diesel fuel saw an even more aggressive jump since Iran began retaliating against US and Israeli strikes, significantly disrupting shipping in the Strait of Hormuz.
Global diesel inventories have remained in tight supply due to heavy demand for heating and power generation during a prolonged winter in the US and other parts of the world and a structural tightness of refining capacity. Sticker prices of everything from food to furniture go up when the cost of diesel goes up, as the fuel is mainly used in freight transportation, manufacturing, agriculture, and global shipping, analysts said.
“In a world where buzzword seems to be ‘affordability’, that is certainly not going to help,” Cinquegrana said.
