OPEK 1OPEK 12) and non-OPEC oil-producing countries held the 33rd ministerial meeting in the capital of Austria on the 5th, deciding to reduce production significantly from November this year, and reduce the monthly output by 2 million barrels per day based on August production. The scale of this production cut is equivalent to 2% of the global average daily oil demand . As soon as the news came out, global energy prices continued to soar. Brent crude oil futures price rose again from US$84 before National Day to around US$94, up nearly 10% in three trading days, and the market is once again pessimistic about the global energy crisis.
Expected production cuts based on the decline in demand is untenable.
The current situation is as follows:
※One side is inflation caused by the supply side. Even if Europe and the United States continue to raise interest rates , the short-term effect is not significant; Europe and the United States have to continue raising interest rates to curb inflation, and economic expectations tend to be pessimistic;
※On the other side, as a substitute for Russia's supply side, OPEC+ controls most of the global crude oil supply, but announced a production cut at this time, which is thought-provoking.
Although Saudi Energy Minister Abdul-Aziz bin Salman said that since the actual output of many oil-producing countries is lower than the quota level, the actual output decline caused by the average daily output reduction of 2 million barrels by is expected to be 1 million to 1.1 million barrels per day.
However, what is important is not how much production is reduced, but what is important is the action of reducing production itself .
When talking about the reasons for the production cut, Saudi Energy Minister Abdulaziz bin Salman said the production cuts were a response to the interest rate hike and weak global economy.
But in fact, in the context of energy sanctions on Russia, the global energy demand for is still insufficient .
first, OPEC+'s energy supply is still at a low level . OPEC+ is not in full production at present. OPEC's daily production is less than 1.2 million barrels, while the daily production of oil-producing countries led by Russia is less than 2.4 million barrels.
Second, Geopolitics leads to structural energy shortage . Russia is the most important natural gas and crude oil exporter in the world, and has a significant impact on global energy supply. However, the long-term sanctions imposed by Europe and the United States on Russia on Russia have led to a significant decline in Russia's future energy exports. The latest sanctions prohibit Russian oil from transporting to third countries by sea through sea.
Among them, natural gas is the most obvious blow, and it is difficult to transfer sales channels through new pipelines in the short term, because pipeline construction takes a long time and land transportation costs are too high. Therefore, this short-term structural contradiction is irreconcilable.
Third, the impact of recession on crude oil demand is not as big as imagined. According to historical data, even during the 2008 financial crisis, global crude oil demand only shrank by 2 million barrels, as economic development led to structural increase in global energy demand. In addition, the International Energy Agency's forecast for crude oil demand for 2023-2026 has also risen.
Therefore, the statement that OPEC+ reduces production based on demand reduction expectations is untenable . So, we are very curious, why should OPEC+ join forces to fight against Europe and the United States?
According to local media reports in the United States, just as the OPEC+ meeting was held, the Biden administration was still trying to persuade Gulf countries to not cut production through various official channels, and warned that the move would have a huge impact on the global economy. White House even described the prospect of production cuts as "a complete disaster" and warned that this could be seen as a "action of hostility."
The White House even tried to ask companies to publicly call for opposition to production cuts, but the move failed. After the news of the production cut was announced, the White House denounced OPEC+ short-sightedness. media analysis said that the United States may then introduce more countermeasures , such as the export ban on some products.
OPEC+ Why do we go against the will of Europe and the United States and force ourselves to get a handful of "wool"?
OPEC+ becomes a community of interests
If we look at it from the perspective of OPEC+, we may be able to grasp their psychology more accurately.
Energy sanctions on Russia are not only a country in Russia, but also a deterrent to all oil-producing countries. If Russia can sanction Russia's oil today, can it also sanction other oil-producing countries without restrictions tomorrow?
Highlights among oil-producing countries, their interests are consistent. If OPEC does not support Russia this time, then next time if Europe and the United States impose sanctions on major powers in , Middle East, and , Russia, as an influential energy supply power, may also step on it.
As we all know, although oil-producing countries are relatively rich, they are usually relatively single in industries and have weak military strength. In the eyes of many countries, they are "big fat sheep". Israel, with a population of tens of millions, beat the Arab League of hundreds of millions to a bruised face. I believe that this painful experience will not be forgotten by Arabs.
and For a long time, Russia has served as the "protector" . On the one hand, it provides certain weapons to OPEC countries, and on the other hand, it provides international constraints to OPEC countries. This also makes Europe and the United States converge in the Middle East and cannot form a sound.
Therefore, this relationship leads to a mutual protection relationship between them, at least on the surface, to support oil prices.
The last handful of "wool", if you want to pull it, be more ruthless!
In the process of this OPEC+ production cut, many people have overlooked a problem, that is, The impact of the global energy revolution on oil-producing countries .
Currently, nearly 1 and a half of the global crude oil consumption come from road transportation, which are basically brought by automobile transportation. However, the global energy revolution is in full swing, and New energy vehicles are replacing traditional fuel vehicles and becoming the main force of land transportation .
It would be fine if the electricity of new energy vehicles only comes from coal, because coal is also a traditional fossil energy source and its stock is limited. The rise in power demand will drive the rise of coal, which will in turn drive the rise of crude oil prices. However, today's new energy comes from nuclear power, wind power, photovoltaic . The characteristic of energy such as
is that it has a low dependence on the industry. Every country has solar energy and wind energy. determines a country's photovoltaic and wind power production capacity no longer depends on its resource endowment, but more on its land area.
and Europe's renewable energy development bill will increase the renewable energy development target in 2030 to 45% of terminal energy. The US President also announced that it will increase the penetration rate of for new energy vehicles to more than 50% by the end of 2030. This move directly puts Europe and the United States in the opposite side of OPEC+ countries .
Of course, this is not just about Europe and the United States. The global new energy revolution has formed a trend, and reducing the voice of oil-producing countries in the global economy has become a major trend.
Some people say that OPEC's production reduction is to kill chickens and get eggs, but the new energy revolution has made the chicken "sick". Since that's the case, "kill" first and eat some meat. If you don't "kill", it may have a little "taste".
So, taking advantage of this round of structural energy crisis, OPEC+ countries have the motivation to raise crude oil prices and finally get a hard fleece!
OPEC+ Why do we go against the will of Europe and the United States and force ourselves to get a handful of "wool"?
OPEC+ becomes a community of interests
If we look at it from the perspective of OPEC+, we may be able to grasp their psychology more accurately.
Energy sanctions on Russia are not only a country in Russia, but also a deterrent to all oil-producing countries. If Russia can sanction Russia's oil today, can it also sanction other oil-producing countries without restrictions tomorrow?
Highlights among oil-producing countries, their interests are consistent. If OPEC does not support Russia this time, then next time if Europe and the United States impose sanctions on major powers in , Middle East, and , Russia, as an influential energy supply power, may also step on it.
As we all know, although oil-producing countries are relatively rich, they are usually relatively single in industries and have weak military strength. In the eyes of many countries, they are "big fat sheep". Israel, with a population of tens of millions, beat the Arab League of hundreds of millions to a bruised face. I believe that this painful experience will not be forgotten by Arabs.
and For a long time, Russia has served as the "protector" . On the one hand, it provides certain weapons to OPEC countries, and on the other hand, it provides international constraints to OPEC countries. This also makes Europe and the United States converge in the Middle East and cannot form a sound.
Therefore, this relationship leads to a mutual protection relationship between them, at least on the surface, to support oil prices.
The last handful of "wool", if you want to pull it, be more ruthless!
In the process of this OPEC+ production cut, many people have overlooked a problem, that is, The impact of the global energy revolution on oil-producing countries .
Currently, nearly 1 and a half of the global crude oil consumption come from road transportation, which are basically brought by automobile transportation. However, the global energy revolution is in full swing, and New energy vehicles are replacing traditional fuel vehicles and becoming the main force of land transportation .
It would be fine if the electricity of new energy vehicles only comes from coal, because coal is also a traditional fossil energy source and its stock is limited. The rise in power demand will drive the rise of coal, which will in turn drive the rise of crude oil prices. However, today's new energy comes from nuclear power, wind power, photovoltaic . The characteristic of energy such as
is that it has a low dependence on the industry. Every country has solar energy and wind energy. determines a country's photovoltaic and wind power production capacity no longer depends on its resource endowment, but more on its land area.
and Europe's renewable energy development bill will increase the renewable energy development target in 2030 to 45% of terminal energy. The US President also announced that it will increase the penetration rate of for new energy vehicles to more than 50% by the end of 2030. This move directly puts Europe and the United States in the opposite side of OPEC+ countries .
Of course, this is not just about Europe and the United States. The global new energy revolution has formed a trend, and reducing the voice of oil-producing countries in the global economy has become a major trend.
Some people say that OPEC's production reduction is to kill chickens and get eggs, but the new energy revolution has made the chicken "sick". Since that's the case, "kill" first and eat some meat. If you don't "kill", it may have a little "taste".
So, taking advantage of this round of structural energy crisis, OPEC+ countries have the motivation to raise crude oil prices and finally get a hard fleece!
