The Financial Times said in a report, that on the impact of Saudi Arabia and Russia’s decision to extend production and export cuts until the end of this year, which led to a rise in oil prices to more than $90 a barrel, for the first time in 2023.
The Financial Times report says that Saudi Arabia, which leads the OPEC+ grouping with Russia, has cut an additional 1 million barrels per day from the global market since July, in what was originally described as a temporary measure.
Russia has also voluntarily reduced exports in recent months and is committed to reducing exports by 300,000 barrels per day until the end of the year.
The report pointed out that this move, which threatens to raise concerns about inflation in the world, is the latest effort by two of the largest oil producers in the world to boost prices, despite the fact that most countries in the world suffer from high energy costs.
The Financial Times report suggested that this would raise tensions with the White House, which criticized Saudi Arabia’s close cooperation with Russia, despite Moscow’s large-scale invasion of Ukraine and the diversion of natural gas supplies as a weapon towards Europe.
The report stressed that the Biden administration is keen to keep gas station prices under control before the presidential elections next year, as inflation and fuel costs have become two main targets for the Republican Party’s attack.
The US National Security Adviser, Jake Sullivan, said after Saudi Arabia’s announcement that there are no plans to hold a bilateral meeting between President Joe Biden and Saudi Crown Prince Mohammed bin Salman during the G20 summit this weekend in New Delhi, and that the announcement of the reduction Voluntary won’t change that.
The report stated that the cuts seem to aim to show the unity of Saudi Arabia and Russia regarding oil policy, and that these supply cuts will lead to a large deficit in the global oil balances.
The report indicates that there are economic figures who fear that Russian President Vladimir Putin will try to use oil supplies to influence the US elections, as potential candidates such as former President Donald Trump have indicated that they will try to get Ukraine to negotiate with Moscow.
In addition to the close relationship between Saudi Arabia and Trump, who made his first foreign visit to the Kingdom in 2017 before the cancellation of the Iran nuclear deal.
The report touched on the Saudi Crown Prince’s desire to raise oil prices to help finance his economic reform program.
The report highlighted the role of Prince Abdulaziz bin Salman, the half-brother of the Saudi crown prince, who holds the position of energy minister in Saudi Arabia, who has put the kingdom’s oil policy on a more assertive footing, despite pressure from the United States to increase production to help calm the inflation situation.
The latest announcement means that Saudi Arabia’s oil production is likely to remain at 9 million barrels per day until the end of December, 25% below its maximum capacity of 12 million barrels per day.