Monday 04 Apr 2022 @ 11:43
Chatham House
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Resisting on oil gives political leverage to the Gulf

EXPERT COMMENT

The Gulf states’ reluctance to pump more oil to help those too reliant on Russia is about more than a desire to strike out against the Biden administration.

Despite overtures from world leaders, OPEC+ stuck with its s current agreement on 31 March to increase production by just over 400kbd per month until August – given the only countries which are capable of lifting output by any significant amount at present are Saudi Arabia and the UAE, and they are definitely not going to budge. News that the White House is about to authorize the release of 180 million barrels from the Strategic Petroleum Reserve (SPR) will only harden minds.

The pair’s reluctance to pump more to help those countries still too dependent on Russian energy has been heavily scrutinized, and largely attributed to their dissatisfaction with the Biden administration in the US for not providing adequate security guarantees.

But although there may be truth to this analysis – and there is little doubt Crown Prince Mohammed bin Salman (MbS) and Crown Prince of Abu Dhabi Mohamed bin Zayed (MbZ) are frustrated with the US – several other pressing factors which are more rooted in energy fundamentals than geopolitics have led Saudi and Emirati leaders to keep to their OPEC+ commitments.

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Channel website: https://www.chathamhouse.org/

Original article link: https://www.chathamhouse.org/2022/03/resisting-oil-gives-political-leverage-gulf

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