Fluctuating Chinese demand has contributed to this year’s volatility in international oil prices. But the latest evolution on the supply side will have immediate geopolitical and financial implications that go well beyond the oil market.
First, the longstanding dominance of OPEC, de facto led by Saudi Arabia, faded because of the explosive growth of shale producers – including in the United States. The swing-producer role that is critical to curtailing large price overshoots in either direction thus moved to them and away from Saudi Arabia and its OPEC allies.In an attempt to restore OPEC’s influence on the oil market, Saudi Arabia and Russia agreed in 2016 to establish an expanded output-quota arrangement.
There is perhaps no better illustration of Saudi Arabia’s return to energy-market dominance than US President Joe Biden’s reported plan to visit the Kingdom – part of his efforts to reduce the energy-price burden on Americans ahead of November’s midterm congressional elections. Yet, as dramatic as this shift undoubtedly is, the new oil-market configuration is fragile, which the Saudi authorities recognise, especially given the rollercoaster ride that oil prices have been on in recent years. There are already signs that high prices are hitting demand both directly and indirectly. The moderation of consumption will be accompanied by the encouragement of more efficient energy use, a tendency that the renewed emphasis on energy security will amplify.
in this energy crisis Biden is NOT getting any help from prince Salman Just forget human rights n make friend to lower gas prices