The American “Oil Price” website published a report, in which it talked about the role of the “OPEC +” organization in increasing oil prices, and its endeavor in every way to push oil prices to rise.
The site said, in its report, translated by “Arabi 21”, that the United States and its main allies see the rise in oil and gas prices as a serious economic and political threat to them. And since the US constraint on raising oil and gas prices as high as possible is removed, Saudi Arabia and its OPEC counterparts want to push them as high as possible.
The site added that OPEC +’s insistence on continuing to increase oil prices – as predicted by the “Oil Price” site a short time ago – is reflected in the extension of the additional significant reduction of the initial cuts in production that were first established last October.
Saudi Arabia, the de facto leader of the OPEC group, announced on August 3 that it would continue with the additional production cut of 1 million barrels per day announced in June, until at least September.
Russia, which is looking to sell its oil at a discount to the OPEC+ price through back channels, said it would trim its additional export cut of 500,000 bpd for August to 300,000 bpd in September.
These extended cuts come on top of the 3.66 million barrels per day cut by OPEC+ since October 2022. Will OPEC+ continue to raise oil prices through further production cuts, and what can the West do about it?
According to the site; The short answer to the first question is “yes.” Last week, the official Saudi Press Agency quoted sources in the Saudi Energy Ministry as saying that the kingdom’s oil production could fall further if necessary.
The sources added, “This additional optional cut comes to enhance the precautionary efforts made by the” OPEC + “countries, with the aim of supporting the stability and balance of oil markets.” For Saudi Arabia, the only possible reason to halt production cuts to keep prices high evaporated when it formalized its move away from the US sphere of influence into that of China and Russia.
Show related news
The United States and its primary allies see rising oil and gas prices (historically the price of gas was calculated at 70 percent of the price of oil) as serious economic and political threats to them, given that they are the largest energy importers. As for China, another large energy importer, these threats seem minimal as it can buy oil and gas at deep discounts from the “OPEC +” price from Russia and several other members of the group.
The site pointed out that, given the removal of US restrictions on raising oil and gas prices more than ever before, Saudi Arabia and its counterparts in OPEC want to push prices as high as possible without squeezing the huge demand from their customers.
Theoretically, Saudi Arabia has a “financial parity price” for oil of $78 for Brent in 2023, which means the average cost of raising a barrel of oil is $1-2 (the lowest in the world, along with Iran and Iraq). But in practice; Due to its mounting financial obligations to various social and economic projects, the financial parity price of oil is much higher than that, and it is constantly rising. The same applies to a greater or lesser extent to all of its counterparts in the Organization of the Petroleum Exporting Countries (OPEC).
The site explained that for Russia in the broader “OPEC +” group, the same reason for keeping oil and gas prices high also exists, but with some difference. Although the price of oil is equivalent to $115 of Brent crude this year, her main consideration is ways to overcome the various embargoes and price caps that were imposed on her oil and gas exports after her invasion of Ukraine, including the introduction of a cap on the price of oil. Russia at $60 a barrel. Given this, Russia’s strategy was very clear, and very effective: to persuade Saudi Arabia to increase the prices of OPEC group oil as much as possible, and at the same time sell its oil for less than this price.
For the United States and its primary allies, ever-increasing oil and gas prices have caused huge spikes in inflation and the interest rates required to counter it, which in turn increases the likelihood of an economic recession.
What can the West do about it?
According to the site, any idea the United States had to persuade Saudi Arabia and its counterparts in OPEC to halt production cuts was spoiled when Saudi Crown Prince Mohammed bin Salman and his Emirati counterpart, Mohammed bin Zayed Al Nahyan, refused to take a phone call from President Joe Biden in early March 2022. At the height of the energy crisis that followed the Russian invasion of Ukraine.
Also, the chances of balancing OPEC + production by significantly increasing production in shale oil fields or conventional fields in the United States are very slim, at least in the short term. This is one of the reasons why the United States has been holding discussions with Iran since the end of June to develop a new version of the Joint Comprehensive Plan of Action known as the “nuclear deal” within the next three months, which means the beginning of American attempts to spoil the Saudi-Iranian relationship that Newly formed after their rapprochement under the auspices of China.The aim is for the new agreement to be in effect before the onset of the winter months, and the only basic conditions set by the United States in these ongoing negotiations are that Iran undertakes to maintain uranium enrichment at 60 percent or less, and that it agrees to inspections again by independent nuclear watchdogs.
The site concluded the report by saying that, in addition to the geopolitical advantages of the United States and its allies in this joint comprehensive action plan, the passage of large flows of oil and gas from Iran will be to counter the cuts from “OPEC +”, and according to the statements of a senior analyst at the “Kpler” company for global energy market intelligence. , according to Oil Price, Iran could see an 80 percent recovery to full production within 6 months and a 100 percent recovery within 12 months, and Iranian production could eventually jump technically by 1.7 million barrels per day, including That’s 200,000 barrels per day of condensate and liquefied petroleum gas (ethane), in a period of 6 to 9 months and that would be a very weighted oil price.
To see the original text (here)
2023-08-09 06:29:43
#American #site #OPEC #fighting #raise #oil #prices #Arabic21
