OPEC is ready to increase oil prices

The latest OPEC meeting is being held today in Vienna. On the agenda there is the issue of oil production limits, which would allow the raising of prices for "black gold". Previously, OPEC unsuccessfully tried to solve this problem at previous meetings with member countries of the oil cartel. Even meeting representatives of OPEC and Russia in Doha at April 17th did not lead to the desired result. Now information has come that Saudi Arabia is ready to support this initiative, which can significantly adjust oil prices.

Geopolitics is more important than the economy

The reasons for the fall in oil prices in the past year were not economic in nature, but were purely geopolitical. The United States has deliberately manipulated the oil market in order to put political pressure on Russia, whose economy is highly dependent on the oil conjuncture. In the context of an increased confrontation with Russia, the United States finalized a nuclear deal with Iran, which allowed the lifting of some sanctions against the Islamic republic. Iranian oil went to the market. The second factor contributing to the drop in oil prices was an increase in oil production from the Gulf countries, especially Saudi Arabia.

Desperate step

This policy hit some positions of the United States too. There has been a strengthening of Iran, a longtime US adversary. On the other hand, a problem arose in Saudi Arabia, which by this time became involved in a proxy war in Syria and invaded Yemen. Saudi Arabia needed money for warfare, but due to the dropped oil prices, it became less and less. Saudi Arabia also faced the prospects of internal destabilization. Earlier, discontent Shiite population, on the one hand, and the radical Wahhabi on the other were pacified by huge sums of money - carrots and sticks. Now the money to implement this policy has become significantly smaller. In the United States, production of shale oil has become unprofitable.

The fact that the United States took this step shows that the global hegemon is willing to risk much in order to achieve victory over Russia.

Forecast

The decision by Saudi Arabia to join the quota of oil production is not final. The United States will do everything possible to prevent this. If, however, this decision is made, then we should expect a new round of the Saudi-American confrontation, where the US will push accusations against the Saudis of supporting terrorism. In these circumstances, the US may increase pressure on the conductors of their interests in Iran, playing on the interests of this country to undermine OPEC policy. Iran is ambivalent on this issue: it is intended to support the OPEC quota plan, however, to join it only when it will bring the production and export of its oil to the level that existed before the introduction of sanctions against the country. From a political point of view, Iran is not interested in weakening Russia, however, it prefers to weaken Saudi Arabia.

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OPEC is ready to increase oil prices