At a time when Biden administration officials were accusing OPEC+ of siding with Russia in its decision to cut oil production by about two million barrels per day, German Economy Minister Robert Habeck spoke out, accusing the US and the EU of inflating and exaggerating market gas prices.
Some countries, including friendly ones, are trying to inflate gas prices and, of course, such prices have to do with the problems we need to talk about, a newspaper quoted the German minister as saying, calling on Washington and Brussels to work together to cut gas prices on the markets.
He also called on Brussels to rein in European countries and introduce the necessary market mechanisms to prevent fuel prices from spiking in the EU. We are not discussing here the motives of any party in setting the prices of commodities, be it oil or gas. But we are calling attention to the fact that each side in the buying and selling equation has its own interests in mind.
The whole thing is a business practice with its own rules and calculations, aimed at profit and gain, from which the states benefit in financing their budgets, etc.
Germany, unlike the White House, has not gone so far as to accuse the US of siding with Russia and putting the German people in a bind by raising the price of American gas, even though this practice amounts to a pattern of greed and economic exploitation that has no place in such circumstances, especially between two allied nations, and is inconsistent with the calculations of world oil markets, which are based on supply and demand and look at the state of the markets over different periods of time.
The US reaction to OPEC+’s decision to lower oil production undoubtedly seems greatly exaggerated. The percentage of production cuts is only aimed at maintaining reasonable prices for producing and exporting countries. It is not about political inclinations.
The decision was not made while prices were high. Everyone remembers that the price ceiling at the height of the Ukraine crisis was $140 per barrel. And everyone knows the reasons for the increase at that time.
OPEC was not involved — it was the geopolitical situation worldwide. Personally, I don’t see the connection between the rising oil prices and the evolution of the Saudi-US relations and why Washington wants these relations to revolve around energy prices.
This is, Riyadh must make major concessions involving the interests of the Saudi people and the country’s development plans in order to please the US and support its plans and policies against Russia. But if the conflict arose not with Russia but with a country that is not a major oil producer, would the US position change? The answer is a resounding no.
Instead, we would have heard accusations and allegations of a different nature befitting the circumstances. Washington is well aware that the OPEC+ decision has nothing to do with backing Russia’s position in the escalating geostrategic conflict with the West. It also knows that responding to its demand for more oil and lower prices is not in the interest of the countries in the organization.
But it keeps asking for something that defies economic and trade calculations and that it is not doing even to its ally Germany, suffering from high gas prices and for which there is a totally unbearable oversupply of gas. But this does not matter to the US, even if it is a temporary setback and the supply of gas to Germany is circumstantial.
This international organization has a status it wants to maintain in international markets. Another issue is that oil prices have not yet risen to a level that can be considered overvalued, and that the main factor in oil markets is not only prices, but also security of supply, an issue that is taken very seriously and strictly by the main oil-producing countries, especially the Gulf countries.
Political circles in the US particularly and in the West in general accuse Russia of weaponizing gas in the ongoing Ukraine conflict. These are the same countries that politicize oil when they criticize OPEC+ producers and exporters for making a decision that some US political circles consider a “hostile act” against their country.
The organization’s members are accused of causing a slowdown in the world economy, when everyone knows the real causes of the crisis that the world is currently experiencing.
The same reasons and consequences underlie the decision to cut oil production because demand is slumping due to the world economic situation and to protect the revenues of exporting countries that depend heavily on oil revenues to finance their budgets. Admittedly, the US is behaving irrationally on many international issues.
They are pushing for a cap on Russian oil prices to deny Moscow access to high oil prices. But at the same time, they get angry when exporting countries argue for maintaining a minimum oil price in the face of a possible recession in key oil-importing markets.
In truth, producing countries have long experienced previous market conditions in which there was a significant price slide that did not even reach ten dollars just a few years ago. Their desire to keep price levels within reasonable bounds does not come as a surprise if we look past conspiracy thinking and trump logic and objectivity in assessing what is going on.
