LONDON — U.S. Energy Secretary Jennifer Granholm has called on oil-producing nations to immediately increase crude supplies to mitigate the surging cost of living.
On Thursday, oil cartel OPEC and its allies agreed to continue with their current output plan, deciding against loosening the taps despite U.S. pressure to help cool the market.
Oil prices have recently hit their highest levels since 2014, and crude-importing countries are feeling the pain. It’s boosted gasoline prices and has added to surging inflation rates around the globe, with consumers already paying more due to supply bottlenecks in the economy.
Asked by CNBC about the U.S.’s relationship with Saudi Arabia, the de-facto leader of OPEC, after the output decision, Granholm said: “In some places, we have strong relationships and in some places we wish our allies would move a little faster.”
“The message is we need to increase supply at this moment so that people will not be hurt during the winter months,” she told CNBC’s Steve Sedgwick on Friday at the COP26 climate summit in Glasgow, Scotland.
President Joe Biden has squarely blamed the reluctance of OPEC and its allies, known as OPEC+, to pump more oil for the sharp rise in energy prices in the U.S. and around the world.
“The idea that Russia and Saudi Arabia and other major producers are not going to pump more oil so people can have gasoline to get to and from work, for example, is not right,” Biden said Sunday at the G-20 meeting in Rome.
OPEC+ decided to rollover its August plan to gradually increase oil production by 400,000 barrels per day each month. Ministers attending the meeting on Thursday said the group was maintaining market balance and remaining wary of potential changes in demand.
Several of the ministers also pointed to the skyrocketing prices of other commodities such as gas and coal to argue that oil markets are lucky to have OPEC+ regulating supply.
International oil benchmark Brent crude was trading at $80.80 per barrel at 7:30 a.m. ET on Friday, up 27 cents from the previous day.
It was also put to Granholm that domestic oil production in the U.S. had abated over the last couple of years, even prior to the Covid pandemic, due to a lack of investment incentives.
“I don’t know why at $80 a barrel those incentives are not there,” she said.
“During Covid, it was down — they backed off because demand was not there because people were staying home, we know that. Now that things are back up, the production should be meeting that [demand], there has been rigs that have been added but not fully,” she added.
—CNBC’s Natasha Turak and Anmar Frangoul contributed to this article.
