OPEC+ "against the wind" to reduce production, the United States threatened retaliation! International oil prices may soar to $130!

On October 5, local time, OPEC+ reached an unanimous resolution that from November 2022, OPEC+ will reduce total oil production by an average of 2 million barrels
per day.
Stimulated by production cuts, international oil prices rose
sharply.
On October 7, WTI November crude oil futures closed up $4.
19, or 4.
74%, at $92.
64 a barrel, up 16.
54%
throughout the week.
Brent crude oil futures for December closed up $3.
50, or 3.
70%, at $97.
92 a barrel, up 11.
32%
for the week.

Oil remains one of the world's indispensable energy sources, and its production and price have an important impact on
the global economic trend.
As a result, OPEC+'s decision to cut production has attracted global attention, especially at a time when inflation is high in
many countries.
"After the 'OPEC+' decision to cut production, the Biden administration considered retaliation", the US "Political News Network" said, "OPEC+" recently announced the decision to cut production angered the United States, some angry Democrats vowed to retaliate, they proposed a number of retaliatory measures
.

So, which countries or regions will be greatly affected after the OPEC+ production cut? How will the U.
S.
government, which wants oil prices to fall, react?

01.
The United States loses its right to speak in oil

Song Guoyou, deputy director and professor of the Center for American Studies at Fudan University, said that OPEC+ production cuts will have an impact on two types of countries or regions, one is 'OPEC+' member countries such as Russia, Saudi Arabia, Kuwait, etc.
, which can directly increase revenue in this way; The second category is oil-importing countries, which have had to bear the consequences of
rising energy costs.
In particular, the United States and many European countries, as the 'big importers' of oil, are facing high inflationary pressures, so the impact of OPEC+ production cuts on these countries will be greater
.
”

It is worth noting that for the United States, in addition to the rising cost of energy imports, the Saudi-led OPEC+ has decided to cut production despite repeated warnings from the Biden administration, which means that the United States is losing the right to speak in
the oil market.
The sharp cut in production is equal to about 2% of global supply, which made Biden's Saudi Arabia's "oil demand" trip in July very embarrassing
.

U.
S.
President Joe Biden said he was disappointed with OPEC+'s decision to cut oil production and was looking for an alternative
.
The U.
S.
Department of Energy has announced that it will supply another 10 million barrels of oil from the strategic oil
reserve to the market next month.
Hochstein added that the White House is also studying the feasibility of other alternatives, planning to work
with U.
S.
businesses, allied countries and the Strategic Reserve sector.

But Francisco Blanch, director of global commodities research at Bank of America, is less optimistic about the White House's oil-market policy
.
In fact, the White House does not have many options available, Blanch said, and using strategic petroleum reserves to mitigate rising energy prices may only be counterproductive
to the United States.

He explained that the long-term release of strategic petroleum reserves will make OPEC's dominance of the global oil market more inflated, "as reserves are gradually depleted, the United States will increasingly surrender market control and flow into the hands
of OPEC+.
" ”

02.
International oil prices may rise to $130

For the low oil prices called for by the Biden administration, some analysts believe that its low oil price target is not simple
.
On the one hand, the US midterm elections are coming, and Biden urgently needs to stabilize prices to harvest votes, on the other hand, it is related
to the suppression of Russia.
On October 5, the U.
S.
National Public Broadcaster commented that the sharp cut in oil production could benefit Russia, the co-chair of OPEC+, and that the increase in energy revenues is crucial
to it.
The low oil prices expected by the Biden administration could reduce Russia's strength
.

However, to Biden's disappointment, international oil prices rose for 5 consecutive days, the largest weekly increase since March: WTI crude oil rose from below $80 / barrel to above $90 / barrel, with a cumulative increase of 16.
5%, and cloth oil rose by more than 10%.

In the face of OPEC+'s decision to cut production, on October 6, the European Commission's official website announced that the European Union has approved the eighth round of sanctions against Russia and issued a series of new sanctions measures, including the imposition of price caps
on Russian petroleum products.

The European Commission said that the European Union has decided to completely ban the import of Russian crude oil by sea, but with the implementation of the price cap policy, if the price of Russian crude oil remains below the price cap, European operators will be allowed to assist Russia in transporting oil
to third countries.

In a report released on October 5, Morgan Stanley predicted that with the sharp production cuts of OPEC+ and the European Union's crude oil embargo on Russia, the supply shortage in the global oil market will continue in
the future.
Morgan Stanley raised its forecast price for Brent crude for the first quarter of 2023 to $100/b from $95/bbl
.

In addition, this sharp rise in oil prices, at the end of September, Goldman Sachs predicted that Brent crude oil will reach $
130 per barrel by the end of this year.
Goldman Sachs said the crude spot market was showing the tightest signs in decades, as demand continued to recover while producers controlled supply
.
"Commodity returns to investors are likely to enhance
as inventories fall further to trigger the risk of depletion," the company said.

03.
U.
S.
-Saudi Arabian relations are strained

"This is a complete disaster that will be seen as hostile by
the United States.
" "The United States will review its future relationship
with Saudi Arabia.
" In response to the OPEC+ jointly announced decision to cut production by 2 million barrels of oil per day, the Biden administration in the United States has frequently threatened to retaliate
.

Some Democrats have proposed a number of retaliatory measures, including a sharp cut in arms sales to Saudi Arabia and the withdrawal of U.
S.
troops from Saudi Arabia
.
According to Reuters reported on the 7th, US Secretary of State Blinken said at a joint press conference with the Peruvian foreign minister on the same day that the United States is "reviewing future relations with Saudi Arabia" and other options
.
Blinken said the OPEC decision was "both disappointing and short-sighted
.
" "As for the future relationship, we are reviewing some coping options
," he said.
We are consulting
closely with Congress.
”

Singapore's "Lianhe Zaobao" said on the 8th that senior senators of both parties in the United States also plan to promote the "Anti-Oil Production and Export Monopoly Act" (NOPEC) to put pressure
on OPEC.

The Saudis are very calm
about the threat from the United States.
On the 7th local time, Saudi Foreign Minister Jubel said in an interview with US Fox TV: "IMHO, the reason for the high oil prices in the United States is that the shortage of oil refining facilities in the United States has lasted for more than 20 years
.
"The United States has not built a new refinery in decades.
"
"Jubel stressed that Saudi Arabia has not politicized
oil.
" Oil is not a weapon
.
It's not a fighter, it's not a tank, you can't shoot with it, you can't do anything
with it.
Saudi Arabia only sees oil as a commodity, he said, "and we see oil as an important part of
the global economy.
" The claim that Saudi Arabia is doing this (cutting production) is to hurt the United States, or to engage in politics in any way, is absolutely incorrect
.
”

The Financial Times said: About half a century ago, due to the support of the United States and Europe and other Western countries for Israel in the war, the Arab countries decided to form an alliance of oil producers to take center stage in the global political stage and stop supplying oil to Western countries, which led to the outbreak of
the first global oil crisis.
Now, at a time of high global inflation and growing consumer anxiety about energy prices and shortages, oil exporters, including Saudi Arabia and Russia, have made drastic production cuts, marking a "dangerous rupture"
between oil exporters and the West, especially the United States.

For Saudi Arabia, which has long relied on U.
S.
military support through "energy for security," it underscores Saudi Arabia's new self-confidence: it can get rid of U.
S.
pressure and take actions
that serve its own commercial and diplomatic interests.
The report quoted Standard & Poor's vice president Diwan as saying the move sends a clear signal that Saudi Arabia "has chosen this (independent) path with even greater risk than rising oil prices.
"
Abdullah, a political scientist in the United Arab Emirates, said: "Washington is obviously not aware of the emergence of a new bay, and we are no longer obeying
Washington.
" ”