Oil price falls as UAE presses OPEC to boost supply
Oil prices fell sharply after the United Arab Emirates offered to raise production in the wake of sanctions on supplies from Russia.
Brent crude dropped by more than 17% at one point to about $112 a barrel, well off their peak earlier this week of $139 amid concern it would rise significantly higher.
US officials have been in talks with major oil producers aimed at boosting supply to make up for the shortfall from Russia.
In a statement Ambassador Yousuf Al Otaiba from the UAE Embassy in Washington said: “We favour production increases and will be encouraging Opec to consider higher production levels.”
His comments may ease pressure on motorists after the average price of a litre of diesel rose today to a record 165.24p – the biggest daily jump since 2000. A litre of petrol is averaging 158.2p, the RAC said.
The US and Canada have announced bans on Russian oil imports, while the UK said it would phase them out by the end of the year. The UK gets 8% of its oil imports from Russia, but about 18% of its diesel.
Russia, normally the producer of about 7% of global supplies, will struggle to find buyers for its oil.
The UAE is a member of the powerful oil cartel Opec and a key influence on both supplies and price. Its statement comes just a week after Opec rebuffed calls to raise production levels, saying it would stick to an earlier plan to gradually increase output.
US markets soared, following earlier gains in Europe. The Dow closed up 2%, while the S&P 500 jumped 2.5% and the Nasdaq ended 3.5% higher.