The price of oil has not dropped below $90 a barrel for practically all of the year. Since that collapse in commodity prices derived from confinement due to the pandemic at the beginning of 2020, everything has been a recovery for the price of hydrocarbons.
What could justify that now that Brent prices do not fall below 85 dollars and WTI 80, the group of oil producers led by Saudi Arabia and Russia decide to cut their production by two million barrels per day?
Few answers remain in the economic arena, and all possible explanations point to a political move.
The government of the president of the United States, Joe Biden, made desperate attempts to get the Organization of Petroleum Exporting Countries (OPEC), plus Russia, to desist from carrying out a cut in their crude production during the meeting they had in Vienna, Austria.
Evidently he failed in his attempt, whose banner was to prevent a cut in crude oil production from aggravating the conditions of the global economy which, due to the effect of high inflationary levels, is heading towards recession once again.
But, there is also a very important local effect in the United States. In a month there will be midterm elections, determining whether the Democrats or the Republicans will retain control of Congress, and a cut in oil production implies a linear increase in gasoline prices.
There is no more direct impact on the mood of American voters than having to pay more for fuel. Of course the countries of the Middle East and Russia know this.
Come on, the impact of these prices on the American mood is such that there are already Republican messages warning that high gasoline prices are part of a Joe Biden strategy for Americans to abandon fossil fuels and favor alternative mobility.
Of course, these kinds of discussions make Russian President Vladimir Putin happy, happy, happy.
Gasoline futures prices have risen more than 15% in a week and this cost is transferred directly to consumers who will react politically in the November elections in the United States, but will also have an economic impact that will bring that economy closer together. to a recession.
The component of energy prices is basic to determine the rest of the prices of the US economy. If inflation doesn’t go down, rates stay high and rising, reinforcing negative sentiments and inhibiting spending and investment. The result is economic decline.
That totally unnecessary missile launched by OPEC, hand in hand with Russia, has effects not only in the United States but throughout the world, from Europe, China and even Mexico.
There is therefore no economic justification for these OPEC member countries plus Russia, which control 40% of world crude oil production, to have cut their production to such an extent.
ecampos@eleconomista.mx
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