BREAKING: Several major oil producing countries have joined Saudi Arabia in announcing production cuts that could send world oil prices higher. Saudi Arabia said it would cut production by 500,000 barrels per day from May until the end of the year.
— had come on the eve of U.S. midterm elections in which soaring prices were a major issue. President Joe Biden vowed at the time that there would be “consequences” and Democratic lawmakers called for freezing cooperation with the Saudis.
Both the U.S. and Saudi Arabia denied any political motives in the dispute, with each saying it was focused on maintaining a healthy market price. Since those cuts, oil prices have actually trended down. Brent crude, a global benchmark, was trading at around $80 a barrel at the end of last week, down from around $95 a barrel in early October, when the earlier cuts were agreed.
Kristian Coates Ulrichsen, a Gulf expert at Rice University’s Baker Institute for Public Policy, said the Saudis are determined to keep oil prices high enough to fund a raft of ambitious mega-projects linked to Crown Prince Mohammed bin Salman’s“This domestic interest takes precedence in Saudi decision-making over relationships with international partners and is likely to remain a point of friction in U.S.
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