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The Big Picture

The Geopolitics of Vienna

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  • Opec-plus’ decision to cut 2 million barrels per day — around 1 million b/d in real barrels — underscores Saudi-Russian unity in the producer group, even as Russia and the West engage in all-out energy war.
  • The cut further strains US-Saudi ties after a short-lived rapprochement, and signals rising consumer-producer tensions.
  • It also emphasizes Saudi Arabia’s wish to keep a firm hand on the market’s reins, after Brent futures had dipped into the $80s.

The world is being buffeted on a weekly basis by an escalating energy war between Russia and Europe that has sent natural gas prices spiraling, kept oil prices elevated and fueled runaway inflation pressures. After last week’s apparent attacks on the Nord Stream pipelines linking Russia to Europe, this week’s twist involved a sharp Opec-plus cut in open defiance of US pressure — and an equally sharp reaction in Washington that included official accusations that the group was siding with Russia, further sales of strategic oil reserves and some inflammatory rhetoric from Congress.

Topics:
Opec/Opec-Plus, Macroeconomics , Sanctions, Military Conflict, Security Risk , Ukraine Crisis
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