Biden to push G20 energy producing countries to boost production

By Andrea Shalal and Jeff Mason

ROME (Reuters) -U.S. President Joe Biden on Saturday will urge major G20 energy producing countries with spare capacity to boost production to ensure a stronger global economic recovery, a senior administration official said ahead of a summit.

Biden and other leaders from the Group of 20 richest countries, meeting in Rome, are slated to discuss efforts to end the COVID-19 pandemic and are also expected to endorse an agreement on establishing a new global minimum corporate tax.

But members are divided on other issues. With oil and gas prices surging, some energy-producing countries such as Russia and Saudi Arabia have not boosted output enough to satisfy countries that are largely energy consumers and worry about energy shortages and inflation.

French President Emmanuel Macron echoed those concerns in an interview https://www.reuters.com/business/energy/macron-says-stability-needed-energy-prices-avoid-supply-breakdown-ft-2021-10-29 with the Financial Times, urging the summit to push for better “visibility and stability on prices” to avoid undermining the post-COVID-19 global economic recovery.

Biden’s top advisers have voiced concerns about energy suppliers not boosting production enough to meet surging demand. Rocketing natural gas prices, with the European benchmark up almost 600% this year, have been fuelled by low inventories and surging demand as economies recover.

Biden’s national security adviser Jake Sullivan https://www.reuters.com/business/energy/us-worried-energy-supply-not-meeting-demand-top-biden-adviser-says-2021-10-07 raised similar issues during a visit to Brussels this month, singling out Russia for its “history of using energy as a tool of coercion, as a political weapon”.

Russia, a major natural gas supplier to Europe, and its energy giant Gazprom are being urged to do more to ease prices in the spot market.

“It’s a delicate time in the global economy, and what’s important is that global energy supplies keep up with global energy demand,” the senior administration official said.

“There are major energy producers that have spare capacity, and we’re encouraging them to use it to ensure a stronger, more sustainable recovery across the world,” the official said, without naming any specific countries.

The official said G20 leaders would not specifically target the Organization of the Petroleum Exporting Countries (OPEC), which includes Saudi Arabia, or set any targets for energy production.

Russian President Vladimir Putin will not attend the summit in person, but is expected to participate virtually.

Comments from Russian Deputy Prime Minister Alexander Novak earlier this month sparked fresh tensions over the Nord Stream 2 undersea gas pipeline, which Washington has long opposed and which is now awaiting clearance from a German regulator.

Novak said clearing the pipeline could help ease shortfalls, sparking concerns that Russia has failed to boost its production of gas – currently delivered via land-based pipelines – precisely to put pressure on Europe to approve Nord Stream 2.

During their talks on the economy, G20 leaders will also back an agreement reached by more than 130 countries on a global minimum corporate tax of 15% that could result in some $60 billion in additional tax revenues per year for the United States alone, the U.S. official said.

(Reporting by Andrea Shalal and Jeff MasonEditing by David Gregorio and Frances Kerry)

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