Due to the increase in the price of petroleum, all the world countries are in the grip of inflation. Inflation is increasing in America too, but the prominent oil exporters do not agree to increase crude oil production. Saudi Arabia, one of the world’s largest oil producers, has made it clear that it will not take any steps to stop rising oil prices. Saudi Foreign Minister Prince Faisal bin Farhan has said that if there is no oil shortage, then crude oil production should be increased.
Saudi will not increase oil production.
According to a report in Business Insider, Prince Faisal bin Farhan told the World Economic Forum in Davos on Tuesday, ‘As far as we know, there is no oil shortage. What Saudi Arabia could have done in this matter it has done it.
According to the International Energy Agency (IEA), Saudi Arabia is the world’s largest crude oil exporter. The IEA prepared a 10-point plan to release more oil from stock to curb rising oil prices in March.
The Russo-Ukraine war is a significant reason for the rise in oil prices worldwide. Russia is one of the largest oil-producing countries in the world. Due to the invasion of Ukraine, strict sanctions were imposed on Russian oil, which caused a shortage of oil in the global market. Crude oil prices have increased by 70 per cent compared to last year. After the Russo-Ukraine war, crude oil, which was $110 a barrel, increased by 20 per cent.
Saudi Foreign Minister made it clear at the World Economic Forum that his country will not increase crude oil production. “We assess that the oil supply is relatively balanced right now,” he said. But the problem we are facing is much more complex than bringing crude oil into the market.
India is also troubled by oil prices.
The rise in oil prices has increased inflation in countries like India, America etc. In the US, the inflation rate in April was 8.3 per cent. At the same time, the inflation rate in India was 7.8 per cent in April. This inflationary situation may become more serious later on.
IEA Executive Director Fatih Birol has also warned that an increase in demand for oil in the summer could lead to a global recession.
Speaking to Bloomberg TV on Monday, Birol said, ‘This summer will be difficult because the oil demand generally increases in the summer. Every country needs to contain oil prices in the global energy market.
But Prince Faisal argues that rising energy prices can be curbed not by increasing crude supply but by investing more in oil refineries. He said, ‘The real problem is of refined oil. In the last one-and-a-half-two years, very little investment has increased the refinery capacity.
Saudi Arabia leads OPEC+, the Organization of the Petroleum Exporting Countries. Along with partner countries such as Russia, Oman and Kazakhstan, the organisation jointly banned the increase in crude oil production from April 2020 to deal with the fall in demand due to Kovid. This deal expires in three months.