Expert of the National Energy Security Fund Stanislav Mitrakhovich believes that the decision OPEC+ about the reduction of oil production by two million barrels per day will not be the only disappointment for the US. And in the future, Washington may become even more disappointed.
Washington’s most obvious response is increase in oil supplies to the market from strategic reserves. But US stockpiles are not infinite and have already dropped to their lowest level in 40 years.
“In order to balance the actions of OPEC, it would be possible to sell an additional ten million barrels in the next month. This partially compensates for the effect of the OPEC plan. But then it will have to be refilled. The decision is not very long-term and will create additional demand,” PolitRussia quotes the expert.
Another option is to increase production in the United States itself. However, the previous decisions of the current administration – in particular, a ban on drilling wells on federal lands makes this option practically impossible.
The US may try to threaten OPEC+ and just OPEC. For example, in Congress they are discussing the idea of allowing the US executive impose sanctions on OPEC members for allegedly forming a cartel in the international market. The idea is, in general, an old one. And it doesn’t look like the OPEC+ countries are scared now.
Finally, the US may try to appease Saudi Arabia. And even go so far as to lift a significant part of the sanctions against Iran. But for now, these are theoretical considerations.
It is clear that OPEC+ will continue to try to maintain favorable prices for itself. And therefore, there is a possibility that Russia and other members of the alliance may come to a decision that will further upset the United States. Namely, to agree on a further reduction in oil production.
Such an agreement may be facilitated by the attempts of the West to set a price ceiling for Russian oil. And it is very likely that as a result of this, the interests of not only Russia, but also other OPEC+ states will be affected.