Page 4 - FSUOGM Week 31 2022

FSUOGM COMMENTARY FSUOGM

OPEC+ tiny production increase is

a slap in face for Biden

Biden's visit to the kingdom secured the small increase in quotas in history,

and will do little to quell high oil prices

GLOBAL ARAB oil exporters responded to a visit by US Kingdom has waned in proportion to the rise
President Joe Biden to the region in July with in the US domestic shale oil industry. Relations
the smallest increase in quotas in history – just took a further hit after the murder of journalist
100,000 barrels per day at an OPEC+ meeting in Jamal Khashoggi in a Saudi embassy in Turkey
Vienna on August 3. that brought down international condemna-
Biden met with Crown Prince Mohammed tion on Riyad (hence the fist bump rather than
bin Salman Al Saud (MbS) of Kingdom of Saudi a handshake).
Arabia (KSA) and was all but humiliated by him. OPEC retaliated to the change in the oil mar-
After MbS met Biden as he arrived with the ket in 2014 by attempting to collapse the price of
now famous “fist bump”, the prince led the pres- oil and make the US shale producers economi-
ident into the hall for talks. Although not widely cally unviable, but the attempt failed as produc-
reported by the western press, the Russian press tion costs at US wells fell and marginal fields
at the event reported that Biden was forced to were closed down.
walk past a photo exhibition of prisoners being In parallel with the deteriorating relations
tortured at the infamous Abu Ghraib prison in with the US, those with Russia have blossomed.
Iraq. Russia has long avoided working with OPEC,
The tiny production cut is more of the same. but that strategy has changed in recent years
Analysts have not hesitated to call OPEC’s and Russia has become an active member of the
decision "a slap in the face [to] the Biden OPEC+ club and co-ordinates with the Middle
administration." Eastern members to control oil prices. Moreo-
Relations between the US and KSA have ver, Arab investment into Russia in regions like
soured in recent years, as the importance of the Kazan has taken off as the governments of Russia

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