The representatives of the thirteen members of the organization and their ten partners thus resist the calls of Westerners to open the oil valves more to try to stop the outbreak of the courses. > Le Monde with AFP
The member states of the Organization of Petroleum Exporting countries (OPEC) and their allies (which together form OPEC+) decided, Wednesday, August 3, to slow down the pace of production increases. The representatives of the thirteen members of the organization and their ten partners are thus resisting the calls of the American president, Joe Biden, to open the oil valves more to try to stop the outbreak.
OPEC, led by Saudi Arabia, and its allies led by Moscow, agreed with an almost derisory increase in production for the month of September: namely “100,000 barrels per day” to compare to Some 432,000 then 648,000 additional barrels set for the previous months, the alliance announced in a press release after their meeting, which was held in Vienna.
The prices immediately went up, “enough to disappoint the American president”, reacted to the agency France-Presse Tamas Varga, of PVM Oil Associates. Edward Moya, from Oanda, quipped on “the smallest increase in the history of OPEC+, which will not help overcome the current energy crisis”. “The Biden administration will not be delighted,” he said, prognosticating “a setback in American-Saudi relations”. Others, like Stephen Brennock, of PVM Oil Associates, saw it as “a symbolic measure to appease” Joe Biden.
of low reserve capacities
The twenty-three members of OPEC+ had to decide a new strategy, their current agreement coming to an end. They found the production levels before the pandemic. In the spring of 2020, the group had chosen to leave millions of oil barrels underground, so as not to flood the market with a gross that he could not absorb because of collapse of the demand.
In the hope of influencing the decision, Joe Biden went for the first time as President of the United States in Saudi Arabia in mid-July, and was held far from his words On a “pariah” state after the assassination of dissident journalist Jamal Khashoggi. His goal was to convince the kingdom to pump further to slow down the flight prices.
By its decision, OPEC+ demonstrates that it remains united and spares Russia, with the interests diametrically opposed to those of Washington. In the press release, it insists on “the importance of maintaining the essential consensus for the cohesion of the Alliance”.
Last week, the French president, Emmanuel Macron, was also at the maneuver by receiving the Saudi Crown Prince, Mohammed Ben Salman. At the end of a meeting denounced by human rights defenders, the two leaders said they wish to “intensify cooperation” to “alleviate the effects in Europe, the Middle East and in the world” of the war in Ukraine.
Beyond geopolitical issues, the recent relative decrease in oil prices, in a context of recession fears, was able to push OPEC+ to play caution. Since their summits last March at unpublished levels since the 2008 financial crisis, the two references of crude, Brent and WTI have lost more than 26 %. The cartel also benefits from the current situation. Saudi Arabia recorded strong growth in the second quarter of 2022, doped by black gold.
With the exception of Saudi Arabia and the United Arab Emirates, the various members also have low reserve capacities. OPEC+ is struggling to respect the quotas displayed, due to extension political crises or the lack of investments and infrastructure maintenance during the pandemic. Russian production, under the yoke of Western sanctions related to the invasion of Ukraine, is also reduced.