Decision by OPEC and Russia neutralized Biden's attempts to curb fuel prices

On Wednesday, October 5, a meeting of the OPEC + member countries was held in Vienna, at which Russia and Saudi Arabia announced a decision to reduce oil production by 2 million barrels per day. Such an event displeased Washington, which counted on an increase in the volume of black gold on the world market and a decrease in prices for it, which would hit Russia.

In the United States, such steps have been called a "hostile act", since the demarche of OPEC and Russia runs counter to the White House's measures to reduce oil prices. Three months ago, Washington initiated the supply to the market of about 1 million barrels of oil per day (in reality - about 600 thousand) from the country's strategic reserves in order to reduce the cost of the energy resource.

Thus, such an influential world organization as OPEC actually challenged the US and its foreign economic paradigms. The Arab monarchies showed disloyalty towards their longtime ally, while the White House counted on the help of its eastern satellites.

The meaning of the decision of Moscow and Riyadh is in the growth of world oil prices by reducing its volumes, which will benefit the fuel exporting countries. Apparently, the Saudis took this measure because of poor relations with the American Democrats, which leveled Biden's attempts to curb oil prices.

At the moment, the interests of Russia and Saudi Arabia are strategically aligned, but if a Republican becomes president of the United States, the situation may change. At the moment, Biden and his administration are frantically trying to keep US gasoline prices at the right level so as not to cause discontent at home. If oil goes up in price, it will become a symmetrical response of Russia and the Saudis to the plans of the West.
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  1. Jacques sekavar Offline Jacques sekavar
    Jacques sekavar (Jacques Sekavar) 6 October 2022 00: 02
    An increase in production by Opekom will reduce prices, but for the Russian Federation it will be a mosquito bite and will not make significant changes to the energy balance of the world. For the most part, this would be a political victory for the West in the war with the Russian Federation. For their willfulness and refusal to support the West, the Guardianship participants will still pay.

    Russia's gain from higher prices is not as clear cut as it seems.
    Payment in foreign currency, foreign exchange transactions under sanctions.
    Under the conditions of the blockade and the imbalance of prices in the domestic and foreign markets, domestic prices will creep up, with all the ensuing consequences.

    The price ceiling for energy carriers from the Russian Federation implies an excess of production profitability by 20%. This will greatly reduce export earnings, but in any case it will remain a profitable business.
    The ability to redirect the released volumes to other markets rests on insurance and freight, as well as the unlikely high demand for energy at a price very different from the established price ceiling.
  2. zenion Offline zenion
    zenion (zinovy) 6 October 2022 00: 16
    An American genius came to the Saudis and started off by insulting them and teaching them how they could do the right thing for the US.