OPEC+ decides to reduce oil production by 1.2 million barrels of oil a day

 

An oilfield near Basra Iraq. Reuters. 

OPEC+ has decided to reduce oil production by 1.2 million barrels of oil a day, which will lead higher gas prices in the United States. Reuters. The reduction would be equivalent of 3.7% of global demand. Oil prices per barrel could raise by as much as $10, bringing prices closer to $100 a gallon at $90 gallons. The US is upset about this move as high oil prices benefit Russia. The cuts will begin next month in May, which is the beginning of the summer travel season in the United States. Not all the OPEC+ countries will be affected by this as they were not able to match production goals in the first place. The move shows that OPEC+ is still close to Russia as it matches a move that Russia did with their oil production today. Russia vowed to continue their cut of 500,000 barrels per day.

My Comment:

One of the few things that is going good in this country right now is the relatively lower gas prices compared to June of 2022 where it was at an average of $5.03 a gallon. At an average of $3.53 a gallon, gas prices aren't low but they are better then they have been. Largely because Joe Biden has mortgaged our future by selling out our strategic petroleum reserves. Which means that the best tool to lower prices has already being used. 

Car travel obviously increases during summer and the summer driving season usually begins in May which leads to higher prices. The timing of this increase in May is not an accident, it will be timed to do as much damage as possible. Gas prices will go up even more at a time they usually go up anyways. That will do a lot of damage to the economy of the United States and Europe. 

And I think that's the point. Much of the rest of the world is frankly tired of the nonsense that America and their European allies are up to. That's why BRICS is a thing and that's why many countries are giving up the dollar for oil purchases. They hate the fact that America is risking not only the economy, but the world itself, in the insane conflict with Russia. 

The Gulf States are included in this of course. Joe Biden alienated the Saudis so much that China was able to organize a peace deal between them and Iran. Biden decided that caring about Jamal Khashoogi, a third rate journalist that the Saudis killed, was more important than keeping good relations with the Saudis. The Russians didn't care about Khashoogi at all, they probably think that killing journalists is a solution not a problem. 

The real victims will be Europe. Unlike America their economy is doing extremely bad. Indeed, the only thing that kept them going this winter was the fact that the weather was mild. Their economy can't really handle another shock and higher gas prices will likely cause quite a bit of damage. This means that it's very possible that they will give up on their adventure in Ukraine.