Saudi Arabia/ Russia conspire to make America rich
Oil prices had their best day in three weeks on Tuesday after Saudi Arabia announced it would be cutting 300,000 more barrels per day than what it was already planning on doing as part of a coordinated petro state effort to reduce the global glut of crude.
Thus far, that OPEC & co. strategy has been ineffective at inducing a significant price rebound, in part due to the resilience of non-OPEC producers (the United States chief among them), but also because of spotty participation rates among the petrostates supposedly committed to erasing the oversupply.
By deepening its own cuts, Saudi Arabia seems to want to lead by example, but the country’s energy minister also had some harsh words for petrostates deemed to be getting a “free ride.”
The FT reports:
Speaking in St Petersburg on Monday after a monitoring committee meeting, which includes OPEC and countries outside of the cartel such as Russia, Saudi Arabia’s energy minister Khalid al Falih said “We are going to forcefully demand participation of all.” He added they would escalate matters to
“leadership beyond oil ministers if we do not see a response”, saying the kingdom would not permit certain countries to “free ride” as others enact drastic curbs. […]
“[We are] not going to allow other countries to free ride and undercut the agreement…everyone needs to contribute,” he said.
Russian energy minister Alexander Novak expressed similar sentiments earlier this week about a drop in adherence to production reduction targets across the petrostate coalition.
The Saudis and Russians might as well be joining forces to demand “Make America rich,” because that is what will happen if the OPEC countries heed their call to cut production to keep prices up.
