Status: 06.10.2022 2:07 p.m
OPEC+ did not comply with the US government’s request and yesterday significantly reduced production quotas. The reactions from the USA are correspondingly violent.
The US government has called the OPEC+ oil alliance’s decision to cut oil production “short-sighted” and a “mistake”. US President Joe Biden was disappointed, said Biden’s national security advisor Jake Sullivan and the director of the National Economic Council in the White House, Brian Deese.
At a time when maintaining global energy supplies is of paramount importance, they said this decision will have a particularly negative impact on low- and middle-income countries. The reduction in production will hit countries that are already “staggering” in the face of high oil prices.
In addition, the global economy is struggling with the “persistent negative effects” of Russia’s war of aggression against Ukraine.
OPEC+ alliance with Russia?
White House spokeswoman Karine Jean-Pierre called the oil production cut “misguided” and a “mistake”. The oil alliance made a decision that only served their own interests. “It is clear that with today’s announcement, OPEC+ is allied with Russia,” said Jean-Pierre.
In view of the planned supply shortage, Biden also wants to consult with Congress on additional tools and powers to reduce OPEC’s control over energy prices, it said. Allianz has a global market share of around 40 percent.
Most recently, gasoline prices in the US had fallen again somewhat. For Biden’s Democrats, that was especially important just before the congressional elections in November. The high inflation in the country has particularly affected the party of the US President in surveys.
New fears of inflation
A production cut had been expected on the oil market, which is why there was no significant price reaction. The markets had anticipated the decision, prices had already risen: some oil ministers had already expressed their preference for a production cut of this magnitude in advance and the markets had therefore priced them in, says Ulrich Stephan, chief investment strategist for private and corporate customers at Deutsche Bank.
Thomas Altmann, market expert at QC Partner, said: “The sudden end of the three-month price decline is bad news for the industry.” In June, a barrel of Brent oil was still trading at around $125 at times. In September, the price finally fell below $90 on fears of a global recession.
“The global supply of crude oil will continue to be artificially reduced in order to support the price of crude oil. This will not fight but fuel inflation and is currently fueling further fears of inflation,” commented Salah-Eddine Bouhmidi, market observer at IG Markets. The decision should also be bad news for consumers, because if the prices continue to rise, the price of petrol should also rise again.