![]() ![]() The news has been particularly poorly received in the US, where the likely consequence of rising petrol prices are painful for Joe Biden ahead of crucial midterm elections. Crucially, although Opec and Opec+ nominally cut production by 2m barrels a day, Russia was already producing well below its quota, meaning that this decision will allow it to produce more oil for a higher price. As well as pushing up petrol prices – and by extension inflation – at a time of economic turmoil, the move is of huge benefit to Russia.Īfter European countries started to reduce their imports, Moscow’s income from oil fell significantly. Opec has been an accepted feature of the marketplace for oil for decades – but the context for this decision is very different. Why has this decision caused such turmoil? “The difference is that if you leave it to the market, it might give you a price that is much lower than what Opec wants to see.” “The market always balances itself,” she said. Kuwait’s acting oil minister, Mohammed al-Fares, described that as a measure to “maintain balance between supply and demand” Carole Nakhle, head of consultancy firm Crystol Energy, told Al Jazeera that explanation was inadequate. ![]() Opec+ states control about 50% of all crude oil, and 90% of proven reserves when they slash output, as they did last week, that pushes the cost up. This Council on Foreign Relations backgrounder provides a more detailed history.Įconomists tend to view Opec and Opec+ as textbook examples of a cartel: member countries agree to coordinate their production of oil in order to influence prices. Russia is part of an expanded group of oil exporters, Opec+, which was founded in 2016 as a way to counter big new challenges to Opec’s ability to control the market, from the emergence of the US as a major exporter to the growth of renewable energy. Today, there are 13 member states, with Saudi Arabia the most influential. The Organisation of Petroleum Exporting Countries was founded in 1960, as a way to force oil prices up in response to US import caps and the huge influence of multinational oil and gas companies. In depth: ‘More than a bet on Russia, this is a bet on Trump’Ī 3D printed oil pump jack is seen in front of displayed stock graph and Opec logo in this illustration picture, April 14, 2020. The WHO estimates between 10-20% of people who have had Covid-19 have mid- and long-term symptoms such as fatigue, breathlessness and cognitive dysfunction. Rees-Mogg is understood to believe it is “unconservative” to tell farmers what to do with their land.Ĭovid | The World Health Organization’s head, Dr Tedros Adhanom Ghebreyesus, has said that “immediate” action is needed to combat long Covid around the world. Solar power | The prime minister is facing a rebellion from Jacob Rees-Mogg’s business department over plans to ban solar power from most of England’s farmland. That takes the total in damages awarded against Jones past $1bn. US news | The conspiracy theorist Alex Jones should pay $965m (£870m) to people who suffered from his false claim that the Sandy Hook elementary school shooting was a hoax, a jury in Connecticut decided on Wednesday. Meanwhile, the price of 20-year UK bonds hit new lows as the Bank of England insisted its £65bn support package would end on Friday. Politics | Liz Truss’ leadership was in fresh peril on Wednesday with calls growing among senior Conservatives to reverse more proposed tax cuts and MPs accusing her of “trashing” Conservative values. Five big storiesĮnvironment | Earth’s wildlife populations have plunged by an average of 69% in just under 50 years, according to a leading scientific assessment, as humans continue to clear forests, consume beyond the limits of the planet and pollute on an industrial scale. Today’s newsletter, with the Guardian’s world affairs editor, Julian Borger, and Dr Neil Quilliam of Chatham House, is about why Mohammed bin Salman would risk one of Riyadh’s most crucial alliances to help the beleaguered Russian regime – and what the news will mean for oil prices and Russia’s ability to prosecute the war. In an interview on Monday, Biden threatened unspecified “consequences” for the Opec+ decision – and last night, US Democrats told Saudi Arabia that if they did not change course, they would force a one-year freeze on all arms sales. ![]()
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