The OPEC+ meeting has ended. The results are excellent, as expected
The OPEC+ countries agreed to reduce oil production by 2 million barrels per day. This is an unprecedented decision supported by Saudi Arabia contrary to US calls to increase oil production against the backdrop of the G7 countries preparing a “ceiling” of prices for Russian “black gold”. “After today’s gesture from the Gulf monarchies, it’s at least clear what the Azov people were exchanged for.”, comments columnist Egor Kholmogorov.
The details of the oil deal are in the column of economist Alexander Dudchak for PolitNavigator.
...We will assume that it was just a coincidence - both the OPEC+ decision and the announcement of the contents of the eighth volume of anti-Russian sanctions took place on the same day.
Deputy Prime Minister Alexander Novak called the OPEC+ decision to reduce oil production unprecedented, and the agreement will be valid until the end of 2023.
The market reaction to the news of the agreement to reduce production is not so sharp. The price of Brent oil during trading on Wednesday rose to $93,2 (+1,5%). But during the day, quotes lost almost all of their growth - by the end of the day, December contracts for Brent deliveries amounted to $91,94, i.e. added only 0,15%. Most likely, they will consolidate at this level, or a little higher. Alexander Novak called the price comfortable, because the budget is formed based on the estimated price of $70 per barrel.
Ah, here is Washington’s reaction... pleasant for anti-Westerners.
US President Biden said he was “disagreeed, disappointed.” He believes that there was no need to reduce production. His disappointment can be understood - it took so long to try to convince the Arab sheikhs to increase production and reduce prices, and in return get a completely opposite result. Washington accused OPEC+ of “solidarity with the Russian Federation” and called the decision to reduce production “wrong.”
Problems with increasing oil and gas production are not only political, but also technical, as consequences of political decisions. The propaganda of “green energy”, a pseudo-ecological future, has led to serious underfunding of the industry. Investments in geological exploration and production were reduced, everyone was going to switch to renewable energy sources (by some... 2050, but no one promised to heat them) and cover up their “hydrocarbon footprints.”
And the propagandists were appropriate - school truant Greta Thumberg, Soros' Greenpeace, the illiterate head of the German Foreign Ministry Annalena Bärbock.
The United States has already tried to bring down oil prices, releasing to the market part of the strategic reserves - 180 million barrels, the sale of which was authorized in March.
“At the direction of the President, the Department of Energy will release an additional 10 million barrels of the Strategic Petroleum Reserve to the market next month,” the White House said.
This volume is unlikely to impress the market - it is equal to the 5-day volume of the new cut from OPEC+.
By the way, Minister Novak was included in the US sanctions list on September 30.
On December 5, in accordance with the new package of anti-Russian sanctions, the EU will introduce a “price ceiling on Russian oil.” And even then, only for what is supplied by tankers, and then if there are no “emergency situations”. They will, they will definitely.
To which Alexander Novak stated:
“Russia will not supply oil to countries that resort to non-market restrictions, such as imposing price ceilings.”
We can assume that it is Russia that will refuse to sell them at non-market prices “under the ceiling.” I want to be sure of this. If they reduced consumption, the price would fall. But there is no way to reduce oil and gas consumption without causing a blow to the standard of living of the population and industry.
Without cutting back, we need to look for new sources of obtaining these resources. This means that they will jostle in markets where there are their own suppliers and consumers. The appearance of such an additional buyer cannot but cause prices to rise.
This means that experience teaches fools nothing. The gas story was not enough for them.
The States spit in the eyes of the European Union, and they say, “God’s dew!” But, after the blowing up of the Nord Streams, the pathetic bleating of the furious but understanding Europeans - “it’s all Russia”, the US statements on the results of the OPEC+ meeting and the imposed anti-Russian sanctions that are killing Europe - all these are already ordinary events.
Total. Relations between Russia and Saudi Arabia continue to strengthen (let this fact slightly reduce the disappointment from the transfer of the “Azovites” to the Saudis, we will consider it part of the strategy).
Following the OPEC+ meeting, the EU economy has no chance of leaving the path of degradation and a decline in the standard of living of its citizens. The closure of production and the rise in unemployment will continue. Support for Ukraine in Germany, the Czech Republic, Slovakia and other countries is under threat.
And this is not the end for Europe: The White House has asked the Department of Energy to analyze the possible consequences of a ban on the export of gasoline, diesel and other petroleum products from the United States.
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Now the editors are aware.