Top oil producers Saudi Arabia and Russia are considering a move to pause their recent efforts to provide the world with more crude, according to people familiar with those discussions, after Washington and other countries said they would release a slug of stored oil in an effort to lower prices.
Riyadh and Moscow have led OPEC and a group of other oil-producing countries in coordinating output closely amid a demand shock last year caused by the pandemic. Other members of that cartel, including the United Arab Emirates, aren’t convinced a pause is necessary, according to these people.
The U.S. said Tuesday that it and a handful of other countries would tap their national strategic petroleum reserves amid high oil and gasoline prices. The move came after repeated attempts by Washington to convince the Saudi-led Organization of the Petroleum Exporting Countries and a group of Russia-led oil producers to open up their taps. The two groups, which call themselves OPEC+, are set to meet next week to review a long-term deal they reached earlier this year to boost their collective oil output.
The deal involves plans to boost output by 400,000 barrels a day each month through next year, until the group hits its pre-pandemic pumping level. The group slashed its output sharply in 2020 as demand evaporated amid Covid-19 lockdowns.
The U.S.-led crude release of up to 70 million barrels threatens to further scramble the supply-demand balance.