OPEC+ stands up to the US and threatens crude cuts

OPEC and Russia (OPEC+) have decided to take the controversial decision to cut oil production by 2 million barrels per day - with the aim of increasing petrol prices at the pumps - if the United States (US) does not withdraw troops and missile systems from Saudi Arabia and the United Arab Emirates (UAE), two of the largest producers of the black gold.

The decision was challenged by the administration of US President Joe Biden on Wednesday. Specifically, Congressmen Tom Malinowski, Sean Casten and Susan Wild presented a bill in recent days that endorsed a significant cut in oil production, which would force the price of crude oil to rise above 100 dollars a barrel, or 102 euros/barrel. 

The drop in OPEC+ production also comes in a context in which the energy markets have seen the biggest fall in their history in the first part of the year 2022, which leads specialists to think of a possible world recession.

For its part, the US administration affirms that the Department of Energy will deliver an additional 10 million barrels of oil from the Strategic Petroleum Reserve (SPR) and will continue to do so under Biden's leadership to promote US energy security.

In this context, Saudi Arabia, which has allied itself with Russia, provides a boost to the Kremlin's invasion of Ukraine and an economic injection to sustain the war against the neighbouring country. 

According to the statement issued by US representatives: "We see no reason why US troops and contractors should continue to provide this service - support to the Saudi military, including the withdrawal of US troops and weapons from the Saudi kingdom - to countries that are actively working against us. If Saudi Arabia and the United Arab Emirates want to help Putin, they should seek to defend themselves as they have now responded to our proposals with a slap in the face that will hurt US consumers and undermine our national interests".

In this context, Senator and former presidential candidate Bernie Sanders agrees with Joe Biden that Washington should respond to the OPEC+ decision by eliminating military aid to Saudi Arabia.

Although Biden visited Saudi Arabia earlier this year to meet with Crown Prince Mohammed bin Salman in an attempt to improve relations between the two countries, the visit did not have the desired effect.  However, it should not be forgotten that Saudi Arabia relies heavily on US defence support to maintain its military. Indeed, the US Central Command is currently working on a new military test facility in the Kingdom.

Meanwhile, critics of Democratic President Biden continue to point to the oil production cut - highlighting the country's foreign dependence - and the murder of Washington Post and Middle East Eye columnist Jamal Khashoggi, raising the question of whether or not a cordial relationship with Saudi Arabia is possible. 

For their part, Saudi Arabia and the UAE have denied, in parallel to the US statements, that the production is politically motivated. In fact, Saudi Energy Minister Abdulaziz bin Salman says that Riyadh "will act and react to what is happening in the world economy in the most responsible and responsive manner".

Since the end of June, Brent crude has fallen by around 20%. Following the Russian invasion of Ukraine, the international benchmark reached a peak of $139 - 141 euros - per barrel. Moreover, more than 40% of the world's oil production is controlled by OPEC and its allies.