The EU’s Embargo On Russian Oil Will Be A Boon For OPEC
- The current oil market climate is complex, to say the least.
- Europe is preparing to enact its embargo on Russian oil and refiners are scrambling for alternatives.
- Many searching for new sources of crude have landed on Middle Eastern producers as a potential alternative.
Tag: Organization of the Petroleum Exporting Countries
Eni CEO: Europe Will Have To Rely On U.S. Oil To Replace Russian Supply
Europe is set to increase its reliance on oil imports from the United States after the EU embargo on Russian seaborne crude imports enters into force in early December, Claudio Descalzi, chief executive of Italy’s energy group Eni, told Bloomberg in an interview on Monday.
Eni CEO: Europe Will Have To Rely On U.S. Oil To Replace Russian Supply
US Set to Delay Russian Oil Price Cap Announcement Until After Midterms, Reports Suggest
The Biden administration intends to delay setting a price cap on Russian oil until after the November 8 midterms amid concerns that the fallout could weigh on Democrats’ standing in the upcoming vote, American media reported on Friday, citing sources.
Contingency planning, negotiations on price both within the administration and with allies, as well as the OPEC+ production cut have also contributed to the delay, the report said.
US Set to Delay Russian Oil Price Cap Announcement Until After Midterms, Reports Suggest
U.S. Accelerates Three-Tier Plan To Reduce Oil Prices
U.S. President Biden has three key strategies in place to lower oil prices.
– The first and foremost strategy is the implementation of the NOPEC bill.
– The second pillar of the plan is to release more crude from the U.S. SPR.
– The third element of the plan to bring oil prices down is to be a concerted effort to encourage U.S. oil firms, shale or otherwise, to increase their production.
U.S. Accelerates Three-Tier Plan To Reduce Oil Prices
Saudis say US sought 1 month delay of OPEC+ production cuts
DUBAI, United Arab Emirates (AP) — Saudi Arabia said Thursday that the U.S. had urged it to postpone a decision by OPEC and its allies — including Russia — to cut oil production by a month. Such a delay could have helped reduce the risk of a spike in gas prices ahead of the U.S. midterm elections next month.
Saudis say US sought 1 month delay of OPEC+ production cuts
Related:
Saudi Arabia Defied U.S. Warnings Ahead of OPEC+ Production Cut
The one-month delay requested by Washington would have meant a production cut made in the days before the election, too late to have much effect on consumers’ wallets ahead of the vote.
…
To entice the Saudis to delay their decision, U.S. officials told the kingdom they would buy oil on the market to replenish Washington’s strategic stockpiles if the price of Brent, the main international benchmark, fell to $75 a barrel, according to U.S. officials and people inside the Saudi government.
Quid pro quo, huh?! 🧐💭
White House Leaves Door Open For Additional SPR Releases + It’s Implications
The White House said on Tuesday that it has many options to counteract OPEC+’s looming production cuts, including the release of even more crude oil from the nation’s Strategic Petroleum Reserves.
White House Leaves Door Open For Additional SPR Releases
Related:
The Implications Of U.S. SPR Withdrawals
Implications of OPEC-+ Production Cut
I think OPEC has not learned from its past mistakes, as it is not a good time to cut oil production by 2 million bpd in November 2022, especially at a time when global economies are under pressure. While higher oil prices at this juncture may bring much needed oil revenues to (national) oil companies and OPEC members, this will come at the cost of accelerating a global recession, bringing more misery to consumers. Consequently, it will weaken global oil demand and oil prices. Oil prices in the range of $70-$80/bbls at this difficult time could be a win-win situation for both producers and consumers, and shield global economies from collapsing. Consequently, the U.S. should take its own measures to enhance its domestic oil production, encourage EVs and halt further releases of the SPR. Running down the SPR will allow OPEC+ more flexibility to play around with production.
Meanwhile:
The Straw That Broke the Camel’s Back: The Best Way to Respond to Saudi Arabia’s Embrace of Putin
The Best Way to Respond to Saudi Arabia’s Embrace of Putin
But this claim is unjustified. OPEC has never cut production in such a record tight market and these production cuts will lead to unsustainably low oil inventories, sending the price of oil skyrocketing out of any “acceptable band.” Furthermore, the G-7 oil price caps plan is not targeted at OPEC; it is strictly limited to Russian oil.
Nor can this Saudi move be justified by the non-existent global recession its leaders cite. Presently markets are very tight, with lush 73 percent profit margins for Saudi Arabia. In other words, there was no immediate need for Saudi Arabia to reduce supply unless they were seeking to harm the U.S. to the benefit of Russia.
Non-existent global recession?!? Low oil inventories?!? Maybe Biden shouldn’t be releasing our oil from the Strategic Petroleum Reserve?! As for never cutting production, before, looks like they have!? 🤷🏼♀️
EU Pushes For More Sanctions Which Will Come Back To Bite It
On February 22, two days before Russian troops entered the Ukraine, the U.S. and the EU put reams of sanctions onto Russia. They also confiscated some $300 billion of Russia’s reserves that were invested in the ‘west’. The sanctions had been negotiated between the EU and the U.S. and prepared for over several months.
EU Pushes For More Sanctions Which Will Come Back To Bite It
What is NOPEC, the US bill to pressure OPEC+?
US legislation that could open members of oil producing group OPEC+ to antitrust lawsuits has emerged as a possible tool to tackle high fuel prices, after the body said it would slash production despite lobbying by the Biden administration.
What is NOPEC, the US bill to pressure OPEC+?
Ms. Cat’s Chronicles 
You must be logged in to post a comment.