Oil, Opec cuts production. Slap Biden, Putin gloats

The war in Ukraine determines increasingly important geopolitical repercussions at the energy level. And the news of the cut in production by OPEC is a real schaffo to the USA, historical ally of theSaudi Arabiaand an assist to Putin, increasingly in difficulty on the military ground and with the economy that risks going upside down within a few weeks. Because it is evident that the cut of 2 million barrels per day it is a favor to the Russian experts, given that the Western embargo does not lead to a drop in demand anyway.

The announcement

L’Opec Plus, the organization of oil producing countries which also includes Russia, has decided to cut crude oil production by two million barrels a day starting in November. The decision came after a meeting in Vienna.

The actual production cut will likely be closer to 1 million barrels per day, as many weaker members have struggled to meet production targets in recent months.

Pro-Putin move

Analysts pointed out that Saudi Arabia’s move, which will harm Western governments’ efforts to limit Russian oil revenues used to support the war in Ukraine, marks a significant moment in Riyadh’s 75-year energy alliance with the United States.

“Saudi Arabia has put OPEC on a collision course with the free world. It has sided with Russia in the name of protective management of the oil market, even as consumers around the world are struggling against inflation and rising cost of living, “he said. Bill Farren-Price, a veteran observer of OPEC at the consulting firm Enverus. “There will certainly be political consequences for Riyadh.”

The US disappointment

The reaction of Joe Biden, president of the United States, was immediate. “The president is disappointed with OPEC’s shortsighted decision to cut production quotas as the global economy continues to face the negative impact of Putin’s invasion of Ukraine,” said National Security Advisor Jake Sullivan. and the director of the National Economic Council, Brian Deese.

“At a time when maintaining the global energy supply is extremely important – reads the statement released by the White House – this decision will have the greatest negative impact on low- and middle-income countries that already have difficulties due to high energy prices. ‘power”.

“In light of this action, the Biden administration will also consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices,” adds the statement, noting how this announcement “reminds us why this is so. it is crucial that the United States reduce its dependence on foreign hydrocarbons ”.

The Saudis

For its part, the energy minister of Saudi Arabia, the prince Abdulaziz bin Salmanrejected suggestions that the cartel’s cuts would harm consumers, arguing that the group’s actions are aimed at encouraging long-term investment in oil production.

The US looks to Venezuela

According to the Wall Street Journal, Washington is negotiating an agreement with Venezuela, which would resume oil exports in exchange for dialogue with the opposition to hold elections in 2024. Caracas now exports 450,000 barrels a day, but could double that quickly. Chevron would be involved, but Eni would also have significant interests. The agreement with Iran is the most difficult hypothesis, but it would also be the one that would hurt the Saudis the most.

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About Eric Wilson

The variety offered by video games never ceases to amaze him. He loves OutRun's drifting as well as the contemplative walks of Dear Esther. Immersing himself in other worlds is an incomparable feeling for him: he understood it by playing for the first time in Shenmue.

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