Wars in the modern era are not merely armed confrontations. They can also be fought in other areas. OPEC+ made the decision to lower oil production this week. A group of significant oil producers from OPEC+. The purpose of the cuts is obvious. OPEC+ favours rising prices. One powerhouse, in particular, will experience the pinch more than the others- The United States. Saudi Arabia has disapproved of oil prices in every region. Prices have decreased for Europe. In Asia, they are unaltered. How about US consumers? They may need to prepare for a hike, then. All oil grades are seeing price increases from Saudi Arabia for the US market. Why is there a difference? For US buyers, the solution is quite simple. Saudi Arabia and the United States are engaged in an open conflict. In July, US Vice President Joe Biden made an attempt to mend the rift. Do you remember the fist bump? It now appears to be working against him. The conflict between the two parties is about oil.

The famous fist bump between US president Joe Biden and Crown Prince MBS of Saudi Arabia

Aramco, the state-owned oil company of Saudi Arabia, has a new rate card. While prices in Asia remain stable, Europe will pay less, and US buyers will pay more. What amount more? For all oil grades, a barrel would cost twenty cents. In the US, gas costs have already begun to rise. The cost of gasoline reached almost $4 this week. The hike is also intended to send a geopolitical message to Americans. Saudi Arabia serves as OPEC and OPEC+'s de facto leader. Joe Biden went there for that reason. In order to maintain low prices, he wants oil companies to release more oil onto the market. In the end, Saudi Arabia and OPEC+ have taken the exact opposite course. Now, they'll provide less oil. The decision to raise pricing in the US is similar to adding salt to existing wounds. Right now, Joe Biden is being questioned hard. Was his trip to Saudi Arabia a complete waste of time? 

Aramco, the state-owned oil company of Saudi Arabia, has a new rate card. While prices in Asia remain stable, Europe will pay less, US buyers will pay more. What amount more? For all oil grades, a barrel would cost twenty cents more. In the US, gas costs have already begun to rise. The cost of gasoline reached almost $4 this week. The hike is also intended to send a geopolitical message to Americans. Saudi Arabia serves as OPEC and OPEC+'s de facto leader. Joe Biden went there recently to get a favorable price range. In order to maintain low prices, he wants oil companies to release more oil onto the market. In the end, Saudi Arabia and OPEC+ have taken the exact opposite course. Now, they'll provide less oil. also the decision to raise pricing in the US. Buyers is similar to adding salt to existing wounds. Right now, Joe Biden is being questioned hard. Was his trip to Saudi Arabia a complete waste of time, for example? Here is the president of the United States' response to the query.

The OPEC+ price hike will help Russia fill up their coffers

It makes a significant dent in the effort of the US, EU, and G-7 to set an oil price cap. When the most potent oil producers in the world are working nonstop to raise prices, a price cap mechanism won't be effective. Russia has been targeted by the west in areas where it is most vulnerable. On the energy front, Moscow's ability to sustain its oil export profits is the fundamental reason why Russia's economy is defiantly battling the sanctions system. Putin has been successful in opening up new markets for Russian oil and gas, allowing Moscow to continue to make money in spite of the loss of Western markets. The decision by OPEC to reduce daily supply by 2 million barrels immediately contributes to Russia's might. Moscow will be able to provide inexpensive oil to a few oil-guzzling countries when global oil prices rise as a result of the output restrictions. For countries like China and India, this strategy has already produced amazing results. Other countries would also want to make use of it. Individual countries' economic concerns may eventually take precedence over their commitment as a group to help Ukraine no matter what.

The White House expressed disappointment and criticised OPEC's decision as shortsighted in response to the oil cartel's decision to reduce oil production. According to a statement from the White House, Biden would speak with the US Congress on possible ways to lessen OPEC's influence over energy pricing. OPEC + holds a monopoly on approximately 50% of the world's oil supplies and 90% of the known oil reserves. Therefore, it is simpler to talk about OPEC's influence on energy prices than to really implement it. Then, as a result of climate activism and the early policies of the Biden administration, the United States is no longer able to pump domestic oil. It appears that OPEC has decided to support Russia. Do you concur? Please tell us in the comments.

All experts agree on their conclusions. Russia benefits more from the output cuts than America. How?  Russia and the west may no longer have close connections, but as an oil producer, Russia continues to be a member of OPEC+. Price increases will result from reduced production. That will add money to Moscow and Riyadh's treasuries. Biden experiences a serious setback. The President of the United States is out of alternatives. He had so far released more oil from America's strategic reserves to offset the output reductions. However, even that stockpile is already rapidly depleting. There are no simple alternatives to Joe Biden, to put it simply. There is no doubt that the United States will retaliate. But Saudi Arabia wins the first round of this oil battle for the time being.

OPEC+ output cut signals a rift between the US and Saudi Arabia

0 Comments