The Biden administration’s senior energy official on Sunday blamed the Opec oil “cartel” for soaring petrol prices in the US, putting more pressure on the group to increase crude output ahead of a meeting later this week.
“Gas prices of course are based on a global oil market. That oil market is controlled by a cartel. That cartel is Opec,” said Jennifer Granholm, the US energy secretary. “So that cartel has more say about what is going on.”
US petrol prices have risen almost 40 per cent since Joe Biden entered the White House, adding to anxieties about inflation. The federal Energy Information Administration recently forecast winter household heating bills would also surge this year.
Granholm’s comments to NBC’s Meet the Press followed a briefing from a senior administration official over the weekend that said President Biden would raise the “short-term imbalance in supply and demand in the global energy markets” in talks at the G20, whose members include Opec linchpin Saudi Arabia.
“What’s important is that global energy supplies keep up with global energy demand,” said the official. “Global energy demand has returned almost back to pre-pandemic levels. Global energy supplies have not.”
The White House’s calls in recent weeks for more fossil fuel production by Opec and Russia sit awkwardly with the administration’s efforts to lead a global fight against climate change and its tightening of regulation in the US oil sector, where production remains well below pre-pandemic peaks.
“Let me just say one thing,” Granholm said, speaking just ahead of the start of the Glasgow climate summit. “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.”
At seven-year highs of more than $80 a barrel, international and US oil prices have more than doubled in the past year, as the coronavirus pandemic eased the global economy burnt more oil again.
Deep supply cuts by Opec producers and partners such as Russia have also helped push up oil prices, which during the depths of last year’s price collapse briefly crashed below zero.
Those huge supply cuts were agreed last year under pressure from former US president Donald Trump, who sought to restore oil prices to protect the country’s oil industry. Opec and allies have been gradually winding down the cuts — but not quickly enough, believe some consumer countries.
While world leaders discuss climate change in Glasgow next week, Saudi Arabia, Russia and other oil producers will meet on November 4 to decide whether to increase more oil supply to the global market.
Opec did not respond to a request for comment.
Analysts including Goldman Sachs expect Brent, the global oil benchmark, to rise above $90 by the end of the year, boosted by an unexpected rise in Asian demand, as power generators stung by soaring natural gas prices switch to burning oil for electricity.
Granholm indicated the US also still considered a release from the country’s strategic oil stockpile to be among the “tools” it could use to reduce prices — a prospect she first raised in an interview with the Financial Times earlier this month.
“I’ll let the president make that decision, make that announcement,” Granholm said.