Oil prices have plummeted after the United Arab Emirates announced that it supports increased production.
Brent crude, a global benchmark, plunged more than 17% at one point after the UAE, a member of the influential oil cartel Opec, made its announcement.
The drop comes after weeks of price spikes caused by supply problems triggered by Russia’s invasion of Ukraine.
Families all throughout the world are feeling the pinch as a result of increased costs.
President Joe Biden and other officials have promised to work to reduce consumer pricing pressures. Officials from the United States have been in contact with oil producers in order to increase supplies.
In a statement issued by the UAE Embassy in Washington, Ambassador Yousuf Al Otaiba said, “We favor production increases and will be pressing Opec to explore greater production levels.”
For more than a year, energy costs have been rising due to a quick increase in oil consumption, which had plummeted during the epidemic.
Russia’s invasion of Ukraine has contributed to pricing pressures, since sanctions make it difficult for the nation, which produces around 7% of world oil supply, to find clients.
The United States and Canada have both imposed prohibitions on Russian oil imports, while the United Kingdom has stated that it will phase out the sanctions by the end of the year.
Oil prices have risen by more than 30% since February 24, reaching $139 (£105) this week before reversing. In US trade, oil prices fell by roughly 12% to over $112 per barrel.
Brent crude rose in Asia trading to approximately $115 per barrel by midday on Thursday.
The International Energy Agency (IEA) has decided to release 60 million barrels of oil from strategic national reserves, but this is insufficient to counteract recent price increases.
On Wednesday, the agency indicated that oil reserves may be tapped further.
“We can deliver extra oil to the markets as one component of the reaction if there is a need, if our governments decide so,” said EIA head Faith Birol.
The UAE declaration comes only one week after Opec rejected requests to boost output, stating it would continue to a previous strategy of gradually increasing output.
Following increases in the US and Europe, Asian stocks soared. The Nikkei 225 index in Japan was up 3.9 percent in morning trade, while the Hang Seng in Hong Kong was up over 1%.