world’s largest producer holds back oil supply

Petrobras' P51 oil platform in operation

Oil has an international price: few countries produce it on a large scale
Photo: Petrobras/ Publicity

Saudi Arabia, which holds the title of the world’s largest oil exporter, is operating at the limit and says it is not in a position to increase production. The statements came from the country’s crown prince, Mohammed bin Salman. In this way, the monarch puts pressure on the price of gasoline, which rose across the planet after Russia’s invasion of Ukraine.

European countries are the biggest importers of oil from Saudi Arabia and have demanded more of this input: it is worth remembering that Russia, which until recently also supplied the Old Continent, reduced exports in response to the economic sanctions imposed after the beginning of the conflict in Ukraine.

As demand is high, but production will remain stable, the trend is for fossil fuel prices, such as gasoline and diesel oil, to remain high. And this phenomenon is global, since oil has an international price.

Previously, Saudi Arabia had predicted to increase daily extraction to 13 million barrels by 2027, but the crown prince’s new statements have thrown that estimate down. Mohammed bin Salman also took the opportunity to criticize clean energy sources, which have been rapidly adopted in Europe. For the monarch, investments in these matrices will bring strong social and economic impacts.

In the medium term, the price of gasoline could fall

Fortunately, other oil producing countries must increase production. The United States and Canada, for example, have already announced investments to expand extraction. The problem is that such measures are not instantaneous: the forecast is that the supply of the input will only meet demand again from next year.

According to the International Energy Agency, other economic measures may also have a positive impact on gasoline and diesel prices over the coming months. Among them is the economic recovery in China and the greater supply of renewable sources in Europe. The information is from the Spanish website Motorpasión.

Watch the video and learn tips to save gas while prices are high!

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