Oil prices have plummeted after the announcement by the United Arab Emirates that it supports increased production. As a result of the UAE’s declaration, Brent crude, the worldwide benchmark for crude oil, it was plummeted by more than 17 percent at one point. The UAE is a member of the influential oil cartel Opec. Following weeks of soaring prices due to supply shortages triggered by Russia’s invasion of Ukraine, the market has finally begun to cool.
Families all across the globe are feeling the pinch as a result of the growing costs of living. President Joe Biden and other officials have committed to reducing the burden on family budgets caused by rising prices. Officials from the United States have been discussing oil producers to increase supplies. “We support production increases and will work to persuade the Organization of the Petroleum Exporting Countries (OPEC) to consider greater production levels,” UAE Ambassador Yousuf Al Otaiba said in a statement issued by the UAE Embassy in Washington and shared on Twitter.
Energy costs have been rising steadily for more than a year, owing to a sharp increase in demand for oil, which had plummeted during the epidemic and is now recovering rapidly. Because Russia invaded Ukraine, there has been an increase in pricing pressure since sanctions make it difficult for the nation – generally the world’s seventh-largest oil producer – to find consumers for its oil.
The United States and Canada have also placed prohibitions on Russian oil imports, and the United Kingdom has said that it would phase out the practice by the end of the year. Oil prices have risen by more than 30% since the 24th of February, reaching a high of $139 (£105) earlier this week before reversing direction. Oil prices fell by around 12 percent in US trading, settling at approximately $112 a barrel. Brent oil rose in Asian trading on Thursday, reaching roughly $115 a barrel by midday on Thursday.
Also recently agreed upon was a release of 60 million barrels of oil from strategic national reserves by the International Energy Agency (IEA). However, this amount is insufficient to counteract the current spike in oil prices. According to the agency’s announcement on Wednesday, further oil reserves may be discovered. If there is a need, if our governments decide that it is necessary, we can increase the supply of oil on the market as part of the response, according to EIA Administrator Faith Birol. The UAE’s announcement comes just one week after the Organization of the Petroleum Exporting Countries (OPEC) rejected calls to raise production levels, saying it would stick to an earlier plan to increase output gradually.
Stocks in Asia surged due to gains in the United States and Europe. The Nikkei 225 index in Japan was up 3.9 percent in morning trade, while the Hang Seng index in Hong Kong was up nearly 1 percent.