The “OPEC +” coalition, led by Saudi Arabia and Russia, succeeded in imposing itself on the global energy market, drawing a new map of the oil market, and practically confirming that it does not revolve around the United States, as did the “OPEC” organization, the traditional entity that includes oil exporting countries.
The alliance also succeeded in holding oil prices together and ensuring that they did not decline, and even pushed prices to increase despite the recession that threatens the global economy, the decline in the growth rate, the continued jumps in commodity prices and the rate of inflation, and the growing uncertainty related to the demand for black crude, especially by large consumers.
This success appeared in several situations, the most recent of which was the decision of the “OPEC +” coalition today, Monday, to make new cuts in oil production by 1.66 million barrels per day, starting next May, and the announcement of Saudi Arabia, the second largest oil producer after the United States, yesterday, Sunday, of a voluntary reduction in oil production. Its production is 500,000 barrels per day, which puts pressure on the global oil market.
The decision of the “OPEC +” coalition is shocking to the major global economies, especially those countries that suffer from high inflation, as is the case in the United States and Europe.
The decision of the “OPEC +” coalition is shocking to the major global economies, especially those countries that suffer from high inflation, as is the case in the United States and Europe, or rely heavily on energy to supply their industrial and productive sectors, or to oil-consuming countries, as is the case with half of the Arab countries and Turkey. India, Brazil and others.
In addition, the new huge reduction in oil production that was decided today came despite the intense pressure exerted by the Joe Biden administration for months against the major oil producers, led by “OPEC +”, and its request to the Gulf states more than once to increase production and not reduce it in order to increase the supply in the markets, and that Until the inflation wave subsides and prices decline, including high fuel prices, which are disturbing the American citizen, and the Biden administration fears its negative impact on the results of the upcoming presidential elections.
This justifies the White House attacking the OPEC+ decision issued today, as well as the International Energy Agency, which saw that the decision causes unrest in the oil market and pushes oil prices up, amid inflationary pressures.
The “OPEC +” position that it took today is not the first of its kind. At the beginning of last October, the coalition took a decision to reduce oil production by two million barrels, despite the intense pressure of the US administration at the time, and its demand to raise production and pump more black crude into the markets with the suffering of the United States. United States from a wave of inflation not seen in 4 decades.
The American threat came less than 3 months after Biden traveled to Saudi Arabia, and failed to persuade Riyadh to raise oil production
Because of this situation, the Biden administration came out on us at the time, threatening the oil alliance, and a prominent official in the White House made a remarkable statement confirming that the US president had begun to reassess his country’s relationship with Saudi Arabia, due to the OPEC + decision to reduce its oil production, and that he was very upset with the decision. Which he described as wrong and short-lived, in Moscow’s own interest, and harmful to US national security interests.
The American threat came less than 3 months after Biden traveled to Saudi Arabia, and failed to persuade Riyadh to raise oil production, to face shortages in the global market, and curb runaway prices, which pushed the price of a barrel to about $139, as it happened on March 7, 2022.
“OPEC +” withstood European criticism and US pressure, which sought to fragment it through several tools, including threatening countries that maintain economic and oil relations with Russia of subjecting them to economic sanctions, and accusing the coalition more than once of siding with Moscow.
In light of the tightening of the OPEC + members, led by Saudi Arabia and Russia, from the American pressure, it is expected that the Biden administration will escalate against the coalition in the coming period if oil and fuel prices rise in the American markets, and that the administration will remove from listing the “NOPEC” project that aims to sue the “OPEC” countries. Including Saudi Arabia and the Gulf states in US courts, under the pretext of violating the monopoly law.
Biden is in a dilemma because of the “OPEC +” decision to reduce oil production, not increase it, and the countries that import petroleum derivatives from gasoline and diesel are in a bigger dilemma, especially with the scarcity of dollar resources required to finance fuel imports from abroad, and expectations of an increase in the price of a barrel of oil to $ 100.
