(LifeSiteNews) — The global oil producing cartel OPEC (Organization of the Petroleum Exporting Countries) this week announced a second surprise cut in global oil production. This move will see oil prices climb, and the cost of everything else will likely follow in its wake.
The move comes as further evidence of the dramatic loss of U.S. power experienced under the Biden administration. Aside from the sanctions on Russia, which effectively hand a global advantage to every nation outside the West, there is the embarrassing fact that under Biden the Saudis have pivoted to Russia – and China.
The neoconservatives have not secured a new era of American power – they are rapidly unraveling it. Their policies have cost America its allies and influence. It is not them, but the American people and the entire western world who will once more pay the price of their predictable failures.
This new cut amounts to a reduction of 1.7 million barrels per day (bpd). However, combined with the first shock cut in October last year, reports now show that oil production has been cut by 3.66 million bpd – or 3.7 percent of global oil demand.
Impact of sanctions
The cut caused oil prices to rise to $85 per barrel – well over the $60 price cap on Russian oil purchases announced by the G7 last September. The Russian response was to announce it would refuse to sell oil to any nation enforcing this measure.
Japan has already secured an exemption to the Biden administration’s Russian oil price cap. Sakhalin-2 oil will be exempt from sanctions until June 2023, under a deal agreed in November 2022. It will be interesting to see how well the rest of the oil sanctions regime holds up. No nation outside the U.S., Canada, Australia or Europe has agreed to this self limiting measure.
The supply of oil is now tightened, with further price rises expected to follow. Analysts from UBS and Rystad expect oil to reach $100 dollars a barrel, with the OPEC cuts to last to the end of 2023 at least.
The Saudis pivot away from the US
A report from The New York Times indicates the state of relations between the U.S. Government and OPEC, an organization it could formerly rely on to time its decisions in line with U.S. demands.
‘This is a new Saudi style of unpredictable maneuver,’ said Karen Young, a senior fellow at the Columbia University Center on Global Energy Policy.
In recent days, Saudi oil officials had signaled that current production levels would be maintained through the end of the year.
What this means is that the Saudis, formerly a U.S. ally, have told the U.S. Government one thing – and then done another. It has left the Biden regime dismayed, and somewhat flat-flooted, as some commentators attempt to spin this as a win for Team Biden.
“The OPEC oil production cuts could be a gift to Biden,” says Rick Newman, who seems to think rising oil prices and a likely hike in inflation are a blessing in disguise. It is incredible news, but it is business as usual for the Biden administration, which is squarely to blame for this mess.
Why has OPEC cut oil – again?
Russian Deputy Prime Minister outlined the reasons for this move yesterday:
The energy policies that many countries are pursuing today and the interference in market mechanisms are also some of the reasons why the oil exporting countries that are members of OPEC+ have voluntarily agreed on additional production cuts.
This is a response to U.S.-led sanctions on Russian oil, which is what is meant by “interference in market mechanisms”. Once again, the neoconservative ideology, which dominates the actions of the Biden administration abroad, has backfired. The results of this approach were predictable, as ever. As ever, the early warnings of disaster were ignored.
How to lose friends and insult people
The first clear sign that the U.S. was losing its long-term ally Saudi Arabia to the Russians came last year, when the Saudis refused to answer the phone to Joe Biden’s administration.
This was a blunder which was years in the making. Following a dubious election in which he claimed 81 million votes, Joe Biden denounced the Saudis for the killing of Jamal Khashoggi, which U.S. intelligence linked to the Crown Prince himself. Saying the Saudis – and their prince – would “pay the price,” Biden then vowed to “… make them, in fact, the pariah that they are.”
Extrajudicial killing is not the sole property of the Saudis. Whilst this remains a crime, it is incomprehensible why anyone would make such an announcement, and then expect the accused to do your bidding.
Having insulted the de facto ruler of the kingdom, Biden ensured that the oil issue became personal. Joe Biden destroyed a strategic partnership which had endured for decades, and drove the Saudis into the arms of the Russians – and Chinese.
Two years of begging – for nothing
Biden first approached the Saudis for more oil in August 2021. This was unsuccessful, as was his repeated effort to secure an increase in production in the first week of February, 2022.
His phone call to the then Saudi leader King Salman, whose readout was published by the White House, offered support in the Saudi’s war on Yemen, but gained nothing in return.
Following this failure, oil prices rose, leading to higher prices at the pump for Americans. With the escalation of the war in Ukraine on February 24, Biden made further overtures to the Saudis – and the United Arab Emirates. These nations refused to be drawn into this neoconservative-led proxy war.
As the Wall Street Journal reported, Biden’s attempts to gain an increase in oil production – and to garner support for a proxy war against Russia – resulted in the leaders of these Arab nations refusing to pick up the phone. This is unsurprising, as Biden had branded the new Crown Prince of Saudi Arabia a killer who presided over a pariah state.
Imaginary values
The response from the Biden administration was to pretend this never happened. The rebuff from the Saudis and the UAE was denied by Jen Psaki. As a neoconservative, with her own involvement in Ukrainian regime change overshadowed by her tenure as White House spokesman, she is accustomed to insisting that reality has not taken place.
Biden’s humanitarian scruples did not prevent him from taking the remarkable step – in March – of then making overtures to Venezuela – and even to Iran. With the oil prices continuing to rise, following the U.S.-led sanctions on Russian oil, Biden forgot his principles and petitioned these nations to raise production.
Secretary of State Antony Blinken, speaking in early March 2022, maintained there was no contradiction between “our values” – and begging for oil from demonized nations.
“We’re not going to separate our values and our interests,” he said, with reports of his pants simultaneously catching fire unconfirmed.
Threats of ‘consequences’
No such deals were reached, and oil prices rose to reach $140 per barrel, according to a Forbes analysis of the 2022 oil market. It pointed out that Biden’s attempts to secure cooperation had resulted in nothing.
In an attempt to convince OPEC to start increasing production, President Joe Biden this past summer went to the Middle East, hoping to convince Saudi Arabia and other OPEC country leaders to increase oil production. This foreign policy attempt has so far gone nowhere.
By October 2022, the picture worsened. With the US, UK, Canada Australia and Europe poised to embargo Russian oil in December, OPEC decided to announce a surprise cut in production of 2 million barrels a day on October 6.
This time, Biden’s response was to threaten them. Accusing the Saudis and the United Arab Emirates of aiding Russia, he warned the two oil producers during a CNN interview that “There’s going to be some consequences for what they’ve done with Russia.”
The practice of threatening and lecturing other nations into compliance – or else – is the only diplomatic strategy known to the neoconservatives. It has resulted in the collapse of one of the longest strategic partnerships enjoyed by the USA, meaning it has lost control of global oil production.
Once again, the American public will foot the bill for this administration’s diplomatic incompetence – and incapability of dealing with a reality created by its own mismanagement.