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Business InsiderDec 27, 2022
OPEC+ Makes Smallest Oil Output Increase in its History
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Image copyright: The Wall Street Journal
The Facts
The Saudi-led Organization of the Petroleum Exporting Countries (OPEC) augmented by a consortium of partners including Russia known as OPEC+, announced on Wed. that it would increase oil output by 100K barrels a day from Sept. - the smallest increase in its history.
According to analysts, OPEC+'s decision is a setback to US Pres. Biden's latest efforts to encourage Crown Prince Mohammed bin Salman, Saudi Arabia's de facto ruler, to pump more oil to help the US and the global economy.
The Spin
Pro-establishment narrative
The ambition of the Biden administration is to make oil supply meet oil demand. In fact, the price of barrels of oil has come down. Earlier this summer the price was about $120/barrel and now it's hovering around $95/barrel. We've seen the fastest decline in gas prices in over a decade. The US policy efforts are on the right track.
Establishment-critical narrative
This minuscule increase in OPEC+ production is a betrayal of Biden's efforts to bolster US energy security. At an equivalent blip of 86 seconds of total global oil demand, this gesture shows that recent US efforts in the Middle East were fruitless. Saudi Arabia and the oil cartels hold all the cards in the energy poker game.
