World

Major blow to US power as OPEC+ cuts oil production

In a major black eye for the perceived influence of the United States, Washington was unable to prevent the OPEC+ oil consortium from announcing its first production cut in two years. The reduction of two million barrels could cost the ruling Democratic Party big in next month’s midterm legislative elections. The expected increases in gas prices – and thus practically all prices – could drastically affect an economy already on the brink for America’s working class.

The administration of President Joe Biden blamed US energy companies – for profiteering off the record prices and price gouging. They also angrily accused OPEC+ of “aligning with Russia”, ignoring the internationally controversial stance that Washington has taken towards the unrest in Ukraine.

Washington may be so upset because there have so few options. Biden has already tapped the Strategic Petroleum Reserve down to levels not seen since 1984, and have just 3 weeks of supply left; the West continues to push for price caps on Russian oil even though they seem impossible to enforce; American mismanagement or corruption – in the form of so-called “missing barrels” – is at its highest rate since 1974; and the shale gas industry remains wary of restarting.

The production cut comes just days after the shocking sabotage of the Russian-German Nord Stream pipeline, which also provoked a major shock to energy markets.

In the West, energy prices had been assumed to be a European problem, but no longer. Add energy prices to the list of America’s major economic issues, along with supply chain issues, record inflation, soaring pessimism, panicked investors and low wages.

 

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