The surprise decision on Sunday by some members of OPEC + to considerably reduce their oil production, which caused a surge in prices on Monday, is a boon for Moscow and new proof of the solidity of the Russian-Saudi couple.
Why such a decision ?
The measurement was taken by eight members of the Organization of the Petroleum Exporting Countries and its allies (OPEC+), for more than one million barrels per day in total.
Unlike the reductions implemented during the COVID-19 pandemic, they preferred to act without going through the formal framework of the alliance, which requires the agreement of everyone, namely the 13 OPEC countries and their 10 partners.
“We are witnessing the emergence of an agile OPEC+ group, capable and willing to take the lead,” said Bjarne Schieldrop, analyst at Banque SEB.
OPEC, created in 1960 and based in Vienna, aims to “coordinate the oil policies” of its members to ensure “fair and stable prices for producers”. In 2016, it formed OPEC+ by including new allies, including Russia and Oman.
It is precisely this argument of “stability” that was invoked by the alliance on Monday, given that oil prices have suffered greatly from the recent banking crisis in the United States and Europe.
Fears of a global recession resurfaced, and investors moved away from risky assets, such as more volatile commodities, in favor of safe havens.
For Stephen Innes, analyst at SPI Asset Management, “OPEC+ has decided to draw a red line at US$80 per barrel of Brent [pétrole de la mer du Nord] for selfish economic interests, much to the chagrin of world leaders”.
How does it comfort Moscow?
The prospect of sharp reductions immediately pushed prices up, especially since it is part of a context of strong demand with the economic reopening of China, the world’s largest importer of crude oil.
This revival is particularly beneficial to Russia, which “needs oil to finance its costly war in Ukraine”, recalls Mr. Schieldrop.
Moscow has, in fact, been the target of numerous Western sanctions in reaction to its invasion of Ukraine, the aim of which was precisely to reduce the financial manna of black gold.
For the SEB expert, the decision thus confirms that “Russia is still an integral and important part” of the OPEC+ group.
And it further strengthens the Russian-Saudi couple, which the war has not shaken. On the contrary, note the experts, who observe this solid common front in the face of the turbulence of recent months.
Especially since, now, the two heavyweights of the alliance are on an equal footing: by significantly lowering its production, Saudi Arabia is approaching the lower volume sold by Russia under the effect of sanctions.
A setback for Washington
The United States had already taken the previous reduction announced in October badly. This is “a new provocation for consumer countries, which are struggling because of high interest rates and high inflation”, reacted the DNB analysts.
If OPEC+ was born in response to the challenges posed by American competition, it is no longer afraid of shale oil produced in the United States, whose growth is running out of steam.
The organization, which dominates the market with 60% of oil exports to its counter, “has significant power to set prices”, compared to the situation a few years ago, according to Mr. Innes.
On the diplomatic level too, “Saudi Arabia is not afraid of the United States”, which maintains complex relations with Riyadh and has lost its influence in the region, notes Neil Wilson, an analyst at Finalto.
“We are witnessing the dawning of a new era,” he says, as evidenced by the recent rapprochement between Iran and Saudi Arabia under the auspices of China.
“The Saudis are doing what they have to do, and the White House obviously has no say in it,” he sums up.