The OPEC oil cartel and allied producing countries including Russia will raise production by 648,000 barrels per day in July and August, offering modest relief for a global economy suffering from soaring energy prices and the resulting inflation.
The decision Thursday steps up the pace by the alliance, known as OPEC+, in restoring cuts made during the worst of the pandemic recession. The group had been adding a steady 432,000 barrels per day each month to gradually restore production cuts from 2020.
The move to increase production faster than planned comes as rising crude prices have pushed gasoline to a record high in the U.S.
On Thursday, gas prices reached a record $4.71 a gallon in the U.S. The price of gas has jumped $1.67 in the last year.
While the jump in supply should provide some relief at the pump, President Joe Biden said on Wednesday there is not much he can do in the short term to lower prices.
"There’d be an overwhelming need for the Russians to sell it, and it would be sold at a significantly lower price than the market is generating now," Biden said. "There’s a lot going on right now, but the idea we’re going to be able to, you know, click a switch, bring down the cost of gasoline, is not likely in the near term, nor is it with regard to food."
Biden said one alternative, however, is lowering the costs on other services, such as daycare, to give Americans some relief.
"We can’t take immediate action, that I’m aware of yet, to figure out how we bring down the price of gasoline back to $3 a gallon. And we can’t do that immediately with regard to food prices either," he said. "But we can compensate by providing for other necessary costs for families by bringing those down."