To curb the current escalation in energy prices, more oil is needed. More needs to be extracted.
Yesterday, the energy ministers belonging to the group of the most industrialized countries on the planet (G-7) asked the OPEC cartel to make an effort. "We call on oil and gas producing countries to act responsibly and respond to the adjustment of international markets, noting that OPEC has a key role to play," they said.
However, since the Ukraine war began, the cartel has not budged from its plan. Up to three times it has met by videoconference to discuss the matter. Some of these virtual summits barely exceeded fifteen minutes in length. The result was always the same: the roadmap adopted in July 2021 is maintained, with monthly increases of nearly 400,000 barrels per day.
Why this rigidity of the cartel? In the first place, because high prices (six months ago a barrel of Brent was at 70 dollars, now it is close to 115) increase the income of these states. But also because in all its summits OPEC is surrounded by ten allied producing nations, among which is Russia.
Well, the G-7 note issued yesterday is not particularly kind to Moscow. He calls the war of aggression against Ukraine "unjustifiable", "unprovoked" and "illegal" and points out that Russian troops have committed "atrocities". Likewise, the G-7 invites consumer countries to cut energy bridges with the Russians and is in favor of an embargo on imports of their oil and believes that it is especially urgent "to reduce dependence on natural gas from Russia for Europeans ”.
It is understood that in the face of this hostile stance towards a close ally of its organization, OPEC has so far not been willing to open the tap further. The cartel is scheduled to meet next week. "Unless someone is willing to come and bring 10 million barrels, we don't see someone who can replace Russia," Suhail al-Mazrouei, the minister of the United Arab Emirates, declared after the invasion.
Although it seems contradictory, at the same time that the G-7 asks for more hydrocarbons to be removed to overcome the adverse situation, it proposes a decarbonization strategy. In a plot twist, the same agency acknowledged that government measures to ease the consumer crisis — for example, subsidies for fossil fuel consumption — go against previous climate promises. "However, we aim for our relief measures to be temporary and targeted and we reaffirm our commitment to phase out inefficient fossil fuel subsidies by 2025," the statement read.
The energy ministers also pledged to end direct public support for foreign fossil fuel projects by the end of this year, although they will allow "country-defined" exceptions.
The G-7 ministers made a mention of nuclear energy when reaffirming its role in the energy mix, "to provide affordable energy with low carbon emissions and contribute to the security of energy supply as a base energy source and flexibility of the net". Of course, they clarify that these recommendations on nuclear energy are valid "for those countries that have chosen to use it", which shows the fracture between France (which is committed to the atom) and Germany (which wants to eliminate it).
