Opec+ to increase oil supply after US overture to Saudi Arabia

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Biden scored a victory in the international sphere after he convinced the Saudis and the Opec+ to increase their oil production to control the oil price inflations.

The move is seen as a step towards building a fresh bridge between the US and Saudi Arabia, which has been sore for the past few years. It was a result of a high-level diplomatic meeting between the two states this week.

It also signifies the US change in their stance since the latest actions of Opec have caused an increase in domestic fuel prices.

The new move is focused on energy and economics and was dealt with by the King himself, instead of his famous son Crown Prince Mohammed bin Salman.

One of the promises by Joe Biden was to rebuild the cooperation between the two nations. He also condemns Khashoggi’s murder and other human rights infringements.

Recently many analysts have said that there is a change in America’s approach towards Saudi. There are various reasons for it, from the Saudi being the captain of the Opec to aiding the Saudis in their bid to solve the Yemeni crisis and other issues.

The news of the increment of 4,00,000 barrels a day by the Opec+ nations, arrived as a surprise to the traders. They only expected propping up of prices by this group since its last week’s fall by 20%.

Opec+ nations came together to discuss on Thursday after increasing American pressure over them. The American pressure was based on increasing fuel prices which were increasing for a year, and also on the fears of inflation.

Last month Biden released oil from the emergency stockpile to control the price inflation unsuccessfully. It was done after they refused the American call to increase production.

After the declaration of their decision the oil prices fell, but later on, rose marginally.

The oil advisors of Saudi have declared that it is not a political move but a rigorously identified move with its appraisal of the oil market.

But there is a forecast of supply overwhelming the demand next year when the increment is set to be in motion.

According to the statement of the diplomatic meetings between the two, the meeting went well. They also emphasized that there was no quid pro quo agreement between the two to warm their relationship or to further the cooperation in energy and economy.

Even though the Saudis are not satisfied with Biden’s distancing from the crown prince, the Americans have welcomed the Opec move.

There was a fear that Opec will continue their hold back to prop up the price as the discovery of the new variant has led to a drop in prices. But it was not. It was geopolitical matters that compelled them to make a new decision.

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