OPEC+ announced on Wednesday that it would cut production by 2 million barrels per day starting in November. In all its history, the cartel has never reduced its production so much. How to explain this announcement, in the midst of an energy crisis?

The announcement of a reduction in production is not a surprise, but the extent of this reduction (2 million barrels per day â Mbd â i.e. 2% of the world production which is close to 100 Mbd) is one of them.

The price of oil which had fallen to historically low levels in 2020 during the pandemic - we even observed negative prices on the New York Stock Exchange in May 2020 - has rebounded strongly in 2021 with the economic recovery. This price increase has been reinforced by the lack of investment in oil production, the fight against climate change encouraging large companies and operators to reduce their costs. think.

The price of oil thus recovered to around $100 at the end of 2021. The invasion of Ukraine by Russia pushed the price to $130. This price then crumbled and did not exceed 90 dollars for Brent (benchmark oil) at the end of September. The main reasons for this erosion are the fear of a global economic recession and the zero-covid policy of China which slows down economic activity in the country and therefore the increase oil needs. Fearing a drop in demand, OPEC + decided to reduce its production.

While Riyadh and its allies have extended their alliance with Russia by a year, until the end of 2023, should this decision be seen as political support for Russia? © to harm the West and the United States first? Or simply an OPEC+ strategy to gain power and autonomy?

OPEC has 13 members, with Saudi Arabia playing a key role. Among the 10 countries that make up OPEC + with OPEC, Russia is dominant. It is therefore these two countries which decide the policy of the producing States. And the increase in the price of oil goes in the direction of the interests of the two countries.

Saudi Arabia defends its interests first. It sends a strong signal to the United States: any rapprochement with Iran, the main enemy of Saudi Arabia, is considered a threat to Saudi Arabia. However, a return of the United States to the Iranian nuclear agreement, although unlikely in the short term, could be a reality in the long term.

For Saudi Arabia, supporting Russia, showing its distrust of the West, strengthening the power of OPEC more goes in the same direction

For Russia, oil represents the main source of income and supports its war effort. A price increase is welcome.

Are there still Western allies in OPEC+? Why no longer do any of the members of the organization seem to want to play into the West's hands? How much of a paradigm shift is this?

Traditionally the West had allies in OPEC. Even before its creation, in 1945, the famous Quincy agreement (cruiser where King Ibn Saud of Saudi Arabia met, whose prince Mohamed Bin Salman who manages the country is a grandson, and President Franklin Roosevelt) had that in exchange for the protection of the United States, Saudi Arabia would produce all the oil necessary for Western countries. This "unofficial" agreement remained a cornerstone of oil geopolitics well into the 2000s.

At the time of the first oil shock (October 1973 at the time of the Yom Kippur War) Iran, a founding member of OPEC, was led by the Shah, very close to the United States and the Saudi Arabia was still a strong ally

The situation changed gradually. The Islamic revolution in 1979 deprived the United States of support from Iran. But, and in spite of the attacks of September 11 the relation of the United States with Saudi Arabia remained strong, in particular because the United States had to import until 2005 of enormous quantities of pe largely Saudi trole.

The production of oil from shale which has allowed the United States to be almost self-sufficient (taking Canadian production into account) has changed the situation. Barak Obama's policy of moving away from Saudi Arabia to get closer - at least temporarily - to Iran has also cooled the relationship between the two countries. The assassination of Jamal Kashoggi has further widened the fractures.

Joe Biden had very harsh words for Mohamed Bin Salman but the rise in the price of crude led him to try to pressure Saudi Arabia to produce more oil and lower prices . In a month, the mid-term elections will take place in the United States and high gas prices play against the power in place. The OPEC+ decision is a setback for the US administration.

Finally, many countries have refused to take sides in the conflict between Ukraine and Russia and no more OPEC country can really oppose Saudi Arabia and Russia which they two produce half of the oil of this organization. All the factors are there to give these two countries a free hand, at least temporarily.

Following this decision, how much should we fear a worsening of the crisis we are currently going through?

The OPEC+ decision risks destabilizing Western economies already threatened with recession. The increase in the price of crude will weigh in particular on Western economies but also on Asian countries and African countries that do not produce oil. African countries are already suffering from rising food prices

The increase in prices, beneficial in the short term for producing countries, could eventually turn against them. High prices lead to a reduction in demand and can only encourage the development of alternative energies, renewable energies in particular.

Finally, a significant oil income in no way encourages the producing countries to diversify their economies more and more.