Saudi Arabia and Russia announced at the beginning of this September that they would jointly reduce crude oil production by 1.3 million barrels per day until the end of this year (2023). The International Energy Agency (IEA) believes that this move may lead to serious supply shortages and will increase further market volatility. risks of. U.S. National Security Advisor Sullivan responded in an interview yesterday (16th) that communication with senior Saudi officials is currently smooth and he will continue to communicate with the Saudi government on this.

 

The oil shortage caused by the Russia-Ukraine war has caused international oil prices to soar. Oil prices have continued to fall in recent months. In order to "recover" from the sharp decline in energy revenue in the past year and a half, Saudi Arabia and Russia have successively supported the stability of the oil market. On the grounds of peace and balance, Saudi Arabia voluntarily reduced production by 1 million barrels per day and extended it for three months to the end of December 2023; Russia also reduced oil production by 300,000 barrels per day until the end of the year.

 

According to the Hong Kong Commercial Daily, the latest report of the Organization of the Petroleum Exporting Countries (OPEC) on the 12th showed that due to Saudi Arabia’s extension of production cuts, the global oil market will face a supply shortage of more than 3 million barrels per day in the next quarter, causing global oil supply and demand to rise. Hitting the largest gap since 2007, international oil prices soared upon hearing the news. The IEA also said that oil inventories are at disturbing levels, raising the risk of another sharp swing, which is not good for producers or consumers given the current fragile economic environment.

 

According to "Al Jazeera", Sullivan said in an interview on the 16th that senior officials from the United States and Saudi Arabia have continued to communicate to ensure stable supply in the global crude oil market.

 

But London Brent crude futures for November delivery rose $1.42, or 1.57%, to settle at $92.06 a barrel, a new high this year. "Peninsula" mentioned that OPEC, led by Saudi Arabia, controls more than 40% of the world's crude oil production. Even if the United States, Brazil and Iran have successively increased production, they have not been able to completely offset the impact of production cuts. High energy prices will affect inflation and even Whether the Federal Reserve will continue to raise interest rates will also test how Biden coordinates with Saudi Arabia in the future.