U.S. President Joe Biden reversed his own administration's policy in a bid to place Saudi Arabia and its Middle Eastern allies from calling Saudi Arabia a pariah state that was not crucial because interests to fist bumping Saudi Crown Prince Mohammed bin Salman in July Joe Biden took a massive U-turn just as Washington thought it had managed to salvage ties with Saudi Arabia and the global oil cartel controlled by it Riyadh has given the United states a big shock Saudi Arabia has chosen to support Russia plus took a major decision on Wednesday that will ensure oil prices escalate helping Russia shore up revenues for its war machine.
OPEC plus has just decided to reduce production by two million barrels per day from November the production cut by the world's strongest oil alliance of which Russia is a major party is aimed at stopping the slump in oil prices that have been witnessed recently oil prices have fallen to roughly $80 a barrel from more than $120 in early June amid growing fears about the possibility of a global economic recession a drop in oil prices meant oil producing nations saw a reduction in their incomes OPEC nations take their energy export revenues seriously and so does Russia therefore by cutting down on supply OPEC plus wants to drive through prices up that's a severe dent in the United states U and G7's campaign to place a price cap on oil prices a price cap mechanism won't work when the most powerful oil producers of the world are working tirelessly to drive places.
Up the West has been trying to hurt Russia where it hurts the most on the energy front Russia's economy is putting up a brave fight against the sanctions regime almost entirely fight against the sanctions regime almost entirely due to Moscow's ability to maintain its energy export revenues Putin has been able to create new markets for Russian oil and gas thus helping Moscow earn a steady income despite the loss of western markets OPEC's decision to cut daily output by two million barrels feet directly into Russia's strength as global oil prices rally due to the production cuts Moscow will be able to offer discounted oil to fuel guzzling nations this formula has already worked wonders for the likes of India and China other nations would want to benefit from it as well eventually the economic interests of individual patients might stump their collective will to support Ukraine come what may reacting to OPEC's decision to cut oil production.
The White House said President Joe Biden was disappointed and called the oil cartel decision short sighted the White House statement said Biden would consult with the US Congress on mechanisms available to reduce OPEC control of energy prices OPEC plus over 50% of global oil supplies and about 90% of proven oil reserves talk of reducing OPEC control over energy prices is therefore easier said than done and then USA has got its ability to pump domestic oil undone owing to climate activism and the early policies of the Biden administration OPEC seems to have chosen to side with Russia.
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