Analysis, news by Mathew Carr
April 3, 2023 — OPEC plus cut supply after the US government reneged on a deal to replenish its strategic oil reserve: FT
That non-genuine behavior by America meant market demand was lower than expected.
Brent crude rose 5% to $84.05/barrel after OPEC+’s surprise move as of 11am in London. Earlier Monday it hit $86.20 on ICE.
The OPEC+ initiative will make Biden pay a political price, even though he’s not paying right now to restock the reserve. OPEC+ will boost its profit per barrel. The move may signal better coordination between major emerging nations.
Saudi Arabia is seeking to join this Chinese-led bloc, according to Newsweek.
Saudi Arabia’s decision to join the Shanghai Cooperation Organization (SCO) has come amid a wave of diplomatic initiatives in the Middle East bringing regional powers closer to China and Russia.
The decision, reached Wednesday through a memorandum approved by the Saudi Cabinet, would establish Riyadh as an official dialogue partner of the SCO, an economic and security bloc that counts China, India, Iran, Kazakhstan, Kyrgyzstan, Pakistan, Tajikistan and Uzbekistan as members. Other dialogue partners include Armenia, Azerbaijan, Cambodia, Egypt, Nepal, Qatar, Sri Lanka and Turkey, while observers include Afghanistan (whose participation is uncertain since the Taliban takeover), Belarus and Mongolia.
Tehran was the most recent to see its status upgraded from observer to full member in September and Riyadh’s decision came just weeks after a China-brokered deal to resume Iran-Saudi diplomatic ties, Newsweek said.
Biden’s decision not to restock crude at these levels suggests the US sees weakness during the next few months in the oil market. Or perhaps it will never restock because it knows oil prices will get cheaper as demand stops rising … permanently.
FT snip:
https://oilprice.com/Energy/Energy-General/Oil-Prices-Soar-As-OPEC-Shocks-The-Market.html
Followup
Telegraph
https://apple.news/AcoZxXjOlQBeuhz3RjNTfaA
CarrZee: Still this Telegraph chart below reminds us all who is the biggest financial beneficiary of the oil trade and most to blame for the climate crisis: the US.
It is the US sellers of oil that will benefit most and they pay tax to the US government. So the US government is, ultimately, financially incentivised to manipulate the oil market higher. So is this tension between the US and Russia, Saudi Arabia real or fake?
[…] All Drivers Pay as Biden Seen Reneging on Oil Demand Deal (4) […]