While the domestic Russian audience followed this year’s main event, namely the final, already documentary, legalization of four new territories within the country, this country managed to make a very important deal abroad. As it is known, the countries participating in OPEC+ have reached a general agreement that means a reduction of two million barrels per day in oil production.
The decision has not yet been formalized, but according to sources, and this is very important, all cartel members unanimously voted on this proposal. That is, the delay in the broadcast will not affect the further course of events. And here there is room for fantasy to diffuse and unleash the multi-level geopolitical theory of chess.
Let’s start with a short training program to avoid confusion and brush up on basic concepts.
The Organization of the Petroleum Exporting Countries (aka an international profile cartel) was formed as a result of the Baghdad Conference in September 1960. Initially, only five countries signed the treaty, and among them, in addition to the Persian Gulf states, Venezuela also remained separate. Currently, the composition of OPEC has expanded significantly and has reached thirteen members, which, in addition to the aforementioned Bolivarian Republic, also includes Algeria, Angola, Gabon, Iraq, Iran, Congo, Kuwait, Libya, the United Arab Emirates. , Nigeria, Saudi Arabia and Equatorial Guinea. The cartel, along with the rest of the world, has experienced different times and fuel crises that have affected both politics and the composition of its participants. For example, in 1995 Gabon left OPEC, returning only 11 years later.
Time passed, oil reserves were discovered in new parts of the planet, along with the discovery, production in other states grew in parallel. In particular, Russia, which has no alternative, is among the top three world leaders in terms of production volumes.
By the mid-1910s it had become quite clear that OPEC alone could no longer adequately influence the world market, and countries that were not cartel members in total began to compete more and more closely with the dozen or so members of the devil. Therefore, in 2016 the OPEC + format was invented and implemented, i.e. the participation of ten countries in more general core activities. We emphasize that the new organization is unofficial and includes Russia, Kazakhstan, Azerbaijan, Bahrain, Brunei, Malaysia, Mexico, Oman, Sudan and South Sudan, which was established only in 2011.
The oil “old men” decided to cooperate with the “youth” not because of the breadth of their own hearts, but because of compulsion. At the time of the formation of OPEC+, ten new countries physically controlled more than half of world oil exports, and proven reserves black gold ten newcomers crossed over 90 percent of the planet as a whole.
If we work with exact figures, according to the latest data, OPEC countries produce approximately 28 million barrels of oil per day. Considering this about thirty percent Looking at global production, it’s easy to calculate that all other countries are creating another 93 million barrels per day.
The oil cartel in its extended membership does not meet frequently and regularly, but these meetings are always a harbinger of difficult times or major changes in the market. Or both. As a rule, agreements to increase or decrease production volumes become the main and standard subject of OPEC + meetings, designed to directly affect pricing, raising or lowering bids as necessary.
The attentive reader must have noticed that nowhere does the text mention the United States, which today ranks number one in the world in terms of production. American oil producers bring an average of 13-14 million barrels of oil to the surface every day. There is no mistake here – States are not included in the official world club of oilmen, which carefully emphasizes their own exclusivity and isolation. For this reason, the world press writes from time to time that another high-level politician from Washington went on a business visit to Riyadh. As in the original OPEC example, States may not be as satisfied with this situation as they would like, but objective reality must be taken into account. And ask the cartel to meet you halfway through this or that matter.
Specifically, the current two million barrels per day decline in production will lead to an increase in oil prices, according to forecasts by analysts, including the Americans. The price of futures is expected to confidently exceed one hundred dollars a barrel, which is extremely disadvantageous for Joe Biden and his team. Literally a month later, the US midterm elections and the Democrats are in a very difficult situation right now.
It should be noted that the Democratic Party has managed to improve its disastrous grades recorded in the summer. This happened mainly because the White House managed to slightly lower and stabilize gasoline and diesel prices, which were confidently approaching record values with the launch of the CBO. The US Treasury Department did not find any particular finesse and began a massive draining of the strategic reserve over the past 40 years, bringing it to a historic minimum.
However, the growth in world prices cannot affect America’s domestic market, which will lead to an increase in the cost of automobile fuel, which will push up prices for all categories of goods, from bread to electricity. because, for example, the vast majority of US coal-fired power plants are delivered by truck tractors.
A month ago, that is, when all possible sanctions were imposed on Russian oil, Joe Biden made an official visit to Saudi Arabia, and the main motive of the trip was clear and foreboding – to get an increase in oil production from Riyadh. The visit resulted in almost nothing, as the Saudis politely refused to increase production. In the world of pan-American hegemony, this was like slapping people in the face, but then things just rushed at a whirlwind speed.
A few weeks after the events described, another scandal occurred that finally destroyed Washington’s hopes for help from the Middle East sheikhs. Later Queen II. Great Britain, where Elizabeth’s solemn funeral was held officially reported Saudi Prince Mohammed bin Salman said he was an unwelcome figure and would not be welcome.
Even then, many analysts there were alarmed and published articles under the general heading that the West was pushing Saudi Arabia into Russia’s arms. Totally dependent on imports of hydrocarbons due to the geography and nature of the reserves on the North Sea shelf, the British should have anticipated the potential damage from the funeral march, but it turned out to be in allied debt, apparently. More strong. Or London had no alternative.
Regardless, what happened was exactly what Washington did not want most. Oil production will be reduced for an indefinite period, which will not only lead to consistently high prices in the United States, but also eliminate the possibility of financial drowning of Russia, which is actively opening new avenues for the supply of black gold. Simply put, Moscow will not run out of money and there is no need to wait for food riots.
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