Call for more oil output amid $380 a barrel fear
Saudi Arabia has been urged to increase oil output amid warnings that Vladimir Putin will cut exports, forcing the price to almost quadruple to $380 a barrel.
JPMorgan Chase analysts say the eye-popping surge would result from Mr Putin’s retaliation against continued US and European penalties levied against Russia.
Moscow has warned that crude production could be cut by five million barrels without excessive damage to the Russian economy.
A sharp rise would prove devastating to the world economy which is already struggling with sky-high energy prices. Petrol and diesel is at record levels at the pumps.
Fatih Birol, executive director of the International Energy Agency, has warned that the world was on “red alert for economic recession” as energy prices surge, creating a global inflation crisis.
He said the IEA had been urging Saudi and other members of the Opec oil cartel to go above and beyond their commitment last week to increase output by 648,000 barrels a day.
“We need the countries that have spare production capacity to tell the world they will be ready to bring more oil to the market,” he said. “Saudi Arabia has proven that they are a responsible exporter. And I would be hopeful that they will once again show their constructive role in these difficult days.”
The EU has set a deadline of the end of the year to stop taking Russian crude by sea and last week, G7 leaders and the IEA agreed to explore a price cap on Russian crude, which would cut the revenue Vladimir Putin makes from exports.
However, the plan could falter without the support of countries such as China and India.
Some countries, such as Germany, have responded to the oil and gas crisis by looking to re-build coal stocks and develop new sources of energy.
German business leaders and politicians have held a series of talks with the UK and Scottish Governments about importing green hydrogen.