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OPEC+ cuts oil production: Saudi Arabia openly opposes the U.S.

Updated: Aug 4, 2023

OPEC+ decided a week ago to radically cut oil production, openly going against the will of the United States. Surprisingly, the media hardly make this a topic of discussion.

This decision has been described by some commentators in the U.S. as a veritable "declaration of war" on Washington, because over the past 50 years Saudi Arabia has always subordinated itself to the wishes of the U.S. when it came to manipulating oil production levels in the U.S. interests for political reasons.

The loss of power of the USA

Apparently, things have changed, because in June, the aged U.S. President Biden flew all the way to Saudi Arabia because he had to beg for an increase in oil production. After all, important midterm elections are coming up in the U.S. and high gasoline prices are very unpopular there. And the EU also urgently needs lower oil prices, especially since it is about to voluntarily give up Russian oil. But the Saudi crown prince has smilingly given Biden the cold shoulder - a first in recent history.

OPEC+ consists of the OPEC countries plus Russia, hence the name. And OPEC+ already cut oil production a month ago, albeit by only 100,000 barrels a day. But that in itself was a slap in the face to the U.S. and the West, which had been clamoring for the opposite, an increase in production.

Therefore, OPEC+'s declaration that they would now cut oil production by as much as two million barrels per day was a geopolitical sensation, confirming what I wrote back in July: The U.S. has largely lost its influence over Arab countries.

Who is isolated here?

So I waited to see if "quality media" like Der Spiegel would pick up on the issue. But wrong, because in the week that has passed since the decision was made, Der Spiegel has published only two articles on the subject. The first article was a dryly worded report on the OPEC+ decision, which also mentioned that this decision was made against the will of the USA. The second article was a column in which Christian Stöcker was allowed to write himself into a rage in his usual manner, and in which the question was "whether one wants to earn money from the fall of civilization." For Stöcker, civilization always goes down when someone has a different opinion than the collective West.

What is still missing in Der Spiegel, however, is a geopolitical classification of the OPEC+ decision. Obviously, Spiegel does not want its readers to know how isolated the West has become in world politics, because the intended narrative is that Russia is supposedly isolated. Yet only the direct vassals of the USA, especially in the EU, have joined the anti-Russian sanctions. Not only is no other country in the world participating in the sanctions, no, the Arab countries, until now loyal accomplices of the USA, are even openly opposing the wishes of the USA.

That it is not Russia that has been isolated worldwide, but that the West has isolated itself internationally, is a bitter truth that readers of German "quality media" are not supposed to know. Instead, the "quality media" gleefully report that the world community has supposedly turned against Russia. The Chinese Foreign Ministry recently showed what this "world community" looks like on a world map.

The affront

But it gets worse for the U.S., as Saudi Arabia has used the current opportunity to lower the price of its oil for some world regions, while raising it for the U.S. This further resounding slap in the face for the Biden administration has been reported by Bloomberg:

"Aramco raised prices for medium and heavy grades for Asia by 25 cents a barrel from the previous month and cut prices for light grades by 10 cents. All official selling prices for Northwest Europe and the Mediterranean were lowered. Prices for the U.S., a relatively small market for Aramco, were raised by 20 cents."

Even though (or perhaps because) Saudi oil has only a small market share in the U.S. market now that the U.S. has become the world's largest oil producer thanks to fracking, the price increase is a very unkind gesture toward Biden, who could use all the support he can get given his abysmal poll numbers ahead of the primaries.

Oil and gas as a tool of politics

Commentators in the U.S. are fuming, accusing the Saudis of everything from a "declaration of war" to an "alliance with Russia," but the event shows one thing above all: It has never been "bad" countries like Russia that use oil or gas as a political weapon. It was always the U.S., which lowered the price of oil in the 1980s, for example, along with the Saudis, to cut into the Soviet Union's revenues. As recently as the end of 2014, the U.S. was still putting pressure on the Saudis to lower the price of oil and hurt Russia.

It has always been the West that has used mineral resources (of other countries) as a political weapon to advance its interests. Today, too, it is the EU that uses Russian gas as a weapon by renouncing it and thus depriving Russia of its gas export revenues. The West has become so accustomed to this behavior that the shock is now great because, for the first time in recent history, this is no longer working.

The Saudis - and with them the other Arab states - have become more self-confident and have noticed that the United States is weakening. As a result, they no longer want to be told how to manipulate the price of oil at the request of the United States. They are concerned with purely economic issues and it is in the economic interest of the oil-exporting countries that the oil price remains stable at a moderately high level. That gives them planning security in their finances.

Therefore, they regulate their production volumes so that the oil price remains between $90 and $120 per barrel. After the price of oil had recently fallen to $80 due to Western policies weakening the global economy (first Corona measures and now Russia sanctions), OPEC+ decided to sharply reduce oil production, which immediately pushed the price of oil back above the $90 mark.

The decision to cut oil production was a purely economic one, but it did not please the West at all, which for 50 years has been accustomed to being able to manipulate oil prices according to its political desires.

The Illusions of the EU

How deeply this habit of the West has burned into the minds of Western politicians, we see right now in the EU. The EU wants to do without Russian oil and gas and although the disastrous consequences are already obvious, they stick to the suicidal course.

Ursula von der Leyen and other leading politicians in the EU and its member states think they can come up with "price caps" for oil and gas now that OPEC is no longer listening to them. The idea is absurd, because in plain language they expect EU oil exporters to sell oil below market prices. Only who will do such a thing?

The result will be a further shortage of oil and gas in the EU, which will further drive up prices in Europe. I'm not saying that, someone who should know is saying it, namely the energy minister of Qatar, as we will see in a moment.

German children's author Habeck was in Qatar a few months ago to beg for gas from the emir, who has LGBT people locked up. Habeck got a snub in the process; first, because Habeck's ideas were unrealistic and Habeck didn't want to buy gas on Qatar's terms, and second, because even if Qatar wanted to, it can't meet Europe's gas needs at all.

Qatar's energy minister was asked about this in an interview and he said that Europe could not become independent of Russian gas because liquefied natural gas is not available in sufficient quantities to replace Russian gas, either now or in the near future. Asked if Europe could replace gas supplies from Russia, he replied:

"No, they will have to rely on Russian gas. I hope that at some point there will be an end to this crisis. That there will be mediations that will bring peace to Europe and hopefully bring some of the Russian gas back to support Europe. If you imagine no Russian gas coming to Europe for more than two winters, I think it's going to be very difficult."

Qatar is not a Russian propagandist, Qatar is a competitor of Russia and wants to sell its own gas. When Qatar's energy minister says something like that, politicians in the EU should start thinking. But there seems to be a problem with thinking things over in Brussels and Berlin, as evidenced by the statements and actions on energy policy of the EU and its member states for months (or even years).

The fact that the Arabs are now becoming disobedient is, against this backdrop, all the more of a shock to the geopolitical architecture. But the German "quality media" do not report a word about this to their consumers. What's the point? Let them continue to vote for the Greens and freeze by candlelight in winter. If not this winter, then maybe next winter?

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