London Daily

Focus on the big picture.
Sunday, Jul 12, 2026

OPEC+ oil boost likely not much help to high gasoline prices

OPEC+ oil boost likely not much help to high gasoline prices

The OPEC oil cartel and allied producing nations decided Thursday to boost production of crude by an amount that will likely do little to relieve high gasoline prices at the pump and energy-fueled inflation plaguing the global economy.
The increase of 648,000 barrels per day in August still leaves the world thirsty for oil as it rebounds from the COVID-19 pandemic and runs up against the inability of the 23-member OPEC+ alliance to meet its production quotas.

OPEC+, which includes Russia, confirmed the decision from its last meeting. Before that, it had been adding about 432,000 barrels per day monthly to put oil back on the market after cutting production dramatically during the height of the pandemic.

The increase was seen as a gesture largely by OPEC leader Saudi Araba to U.S. President Joe Biden, who soon afterward planned his first trip to the kingdom as president where oil production is likely to be a topic next month. Biden, facing political pressure at home, has been urging oil-producing countries to open the taps and help bring down gasoline prices for American drivers.

Gasoline prices worldwide have reached painful highs. In the U.S., they surpassed $5 a gallon for the first time this month before dipping in recent days as global oil prices fell on fears of a recession.

Biden has been under pressure to do whatever he can to reduce prices, including urging Congress to suspend gas and diesel taxes and releasing oil from strategic reserves, although many experts say there’s little he can do.

OPEC, on the other hand, could help lower prices by increasing production — in theory. But many oil-producing countries are struggling to produce as much as the group’s decisions set out.

Nigeria and Angola have longstanding shortfalls, while Russia has been losing some of its production because Western customers are shunning its oil, either from fear of sanctions or because they don’t want to be associated with the war in Ukraine.

According to data collected by the International Energy Agency, OPEC+ production fell 2.8 million barrels per day below the agreed level in May. The production agreement gives laggards until the end of the year to make up their quotas.

“Only very few of them are likely to be able to achieve this though, either because of limited capacities (especially Angola and Nigeria) or because of sanctions (Russia),” wrote commodities analyst Carsten Fritsch at Commerzbank in a research note. “The question therefore is whether countries with spare capacities such as Saudi Arabia or the United Arab Emirates will be allowed to step into the breach.”

Yet doubts have spread in the market about exactly how much spare capacity even the Saudis or the UAE have. And for those two to increase their market share at the expense of other cartel members might be a tough sell.

As of May, surplus production capacity in non-OPEC countries decreased by 80% compared with 2021, according to the U.S. Energy Information Administration. Surplus capacity is oil production that can be brought online within 30 days and sustained for at least 90 days. In 2021, about 60% of the surplus production capacity was in Russia, but much of that was eliminated as of May 2022 due to sanctions, the agency said.

Russia’s war in Ukraine is contributing to high oil prices fueling inflation around the world. At a summit of the Group of Seven leading economies this week, the U.S. pushed for a price cap on Russian oil imports to try to blunt the price spikes and reduce money from oil sales flowing into the Kremlin’s war chest.

The European Union, a key importer of Russian energy, also has approved a ban on 90% of Russian oil imports by year’s end.

After the OPEC+ meeting, U.S. benchmark oil traded down 0.7% on the day, to $109.09 per barrel. That is more than 40% higher than at the start of the year. International benchmark Brent crude drifted 0.4% lower, to $115.83 per barrel.
Newsletter

Related Articles

0:00
0:00
Close
UK Medical Chiefs Update Health Guidance to Promote Everyday Physical Activity
Office of Communications Keeps Wikipedia Under Review Under UK Online Safety Rules
UK Defence Ministry Expands Deep-Strike Capability Through Precision Missile Programme
Russell Group Universities Warn Funding Cuts Could Damage NHS Workforce Training
UK Parliament Calls for National Emergency Broadcast as Heatwave Conditions Intensify
UK and Netherlands Strengthen Naval Cooperation With New Amphibious Defence Partnership
UK Defence Ministry Joins International Missile Programme With One Hundred and Ninety Million Pound Investment
Bank of England Warns Middle East Conflict and AI Risks Could Pressure UK Economy
UK Government Introduces New Rules to Limit Foreign Influence in Political Donations
UK and France Prepare Naval Mission to Protect Shipping Through Strait of Hormuz
United States Pressures UK to Increase Defence Spending at NATO Summit
Bank of England Warns Artificial Intelligence Investment Boom Could Create Financial Stability Risks
Bank of England Begins Direct Oversight of Critical Technology Providers Supporting UK Finance
Andy Burnham Set to Become UK Prime Minister After Labour Leadership Race Clears Path to Downing Street
Scottish Fishing Industry Calls for Emergency Support Amid Rising Costs
UK Supports Stronger European Response to Russian Actions in Ukraine
Devon and Cornwall Police Release Suspect in Ann Widdecombe Murder Investigation
Scottish MPs Demand More Government Support for Fishing Industry
UK Aviation Sector Faces New Rules as Parliament Reviews Passenger Protection Reforms
King’s College London Disciplines Students Over Pro-Palestine Campus Protests
Ministry of Defence Expands Military Capabilities Through New Precision Strike Investment
United Kingdom Condemns Russian Treatment of Ukrainian Children at International Security Forum
House of Lords Reviews Civil Aviation Bill to Strengthen Passenger Rights and UK Aviation Competitiveness
UK Aerospace and Defence Industries Contribute Nearly Forty-Seven Billion Pounds to Economy
UK Government Advances Consultation on Possible Social Media Ban for Children Under Sixteen
United Kingdom Ratifies Global High Seas Treaty to Protect Marine Biodiversity
United Kingdom Joins United States Precision Strike Missile Programme With One Hundred Ninety Million Pound Investment
UK Senior NHS Doctors Vote for Further Strike Action Over Pay and Contract Disputes
BBC Leadership Resigns After Donald Trump Launches Ten Billion Dollar Defamation Lawsuit
UK Fiscal Watchdog Warns Andy Burnham Government Faces One Hundred Billion Pound Budget Challenge
The AI Invoice Shock: Layoffs Didn't Save Managers Money — They Cost Them More
Concern: Sexually Transmitted Bacterium Among Men Develops Antibiotic Resistance
Following Massive Investor Demand: SK Hynix Raises 26.5 Billion Dollars on Nasdaq
Passenger Partially Pulled Out of Ryanair Jet After Cabin Window Fails Mid-Flight
After Four Years, and Under a Heavy Veil of Secrecy: King Charles Meets His Grandchildren, Harry and Meghan's Children
Cross-Party MPs Call for National Climate Emergency Broadcast
Bayeux Tapestry Arrives in the United Kingdom for Landmark Exhibition
United Kingdom Launches Modern Slavery Prevention Programme in Vietnam
Police Warn Against Misinformation Following Disorder in Glasgow
Pension Reform Takes Effect to Consolidate Workplace Savings Industry
Treasury and Bank of England Monitor Economy as Energy Price Pressures Ease
Government Orders Treasury Reform of Disciplinary Procedures Following Civil Servant's Death
Ofcom to Require Major Technology Platforms to Block Scam Advertisements
Labour Apologizes Over Gaza Position in Bid to Rebuild Support
High Court Rules UK-France Asylum Agreement Protection Cuts Were Unlawful
Metropolitan Police Open Murder Investigation Into Death of Former MP Ann Widdecombe
University College London Report Proposes Replacing Council Tax and Stamp Duty With National Property Tax
Treasury Places Amazon, Google, Microsoft and Oracle Under New UK Financial System Oversight Rules
Severe Heatwave Drives Dangerous Ground-Level Ozone Pollution Across Two Thirds of European Union
Westminster in Freefall as Farage's By-Election Gamble Triggers Broader Systemic Crises
×