Following the announcement by the Opec+ countries, last Sunday, that oil production will be reduced by about 1.5 million barrels a day between May and December, the international press ( not the Belgian one, of course ) started speculating about the reasons for this decision. Some media claimed that the decision was due to the fact that there has been too little demand for crude oil lately and prices had fallen back to USD 73-75 per barrel ( which we, citizens, have hardly noticed at the pump at least not much, prices have remained sky-high ).
Reuters has done a somewhat deeper investigation. It concludes that the Opec+ countries decided to cut oil production because :
- there was/is weak global demand for crude oil
- as punishment for speculators capitalizing on low prices
- Opec+ seeks higher prices
- tensions between Washington and Opec+
Not a word about a strategic move by Russia and China literally putting the West on dry seed this way.
All pundits agree that oil reduction will pose a major challenge to consumer governments, such as the US, which are already struggling with high inflation and volatility in the banking sector. The EU does not even figure in the whole discussion.
"We don't think austerity is advisable at this time, given the uncertainty in the market - and we have made that clear," said a spokesman for the US National Security Council ( as if the Opec+ countries would be impressed by that ).
The expected rise in oil prices for the rest of the year as a result of these voluntary cuts could fuel global inflation, prompting central banks around the world to take a more aggressive stance on interest rate hikes. However, that would lower economic growth and reduce the expansion of oil demand," said Victor Ponsford of Rystad Energy in a research note ( which is very accurate )
US President Joe Biden said Monday 03.04.2023 that the OPEC+ oil production cuts announced at the weekend "won't be as bad as you think".
Of course it won't. Joe thinks he is going to make billions from fossil fuel sales. The man is an idiot. He's raving.
The EU has not yet responded to the Opec+ countries' decision.
Olaf Scholtz (D), meanwhile, has made it clear that the sanctions against Russia are against their interests. US gas is much more expensive and of lower quality. Curious what will now unfold behind the scenes. It is expected that some EU member states will still continue to secretly buy oil from Russia to meet their own needs, as they have done on the sly before.