The administration of US President Joe Biden found a way to solve two problems at once: to reduce Russia's oil revenues, and also to reduce the rate of inflation in the United States. This is reported by Bloomberg, citing sources in the administration and OPEC+.

The agency notes that members of the cartel, of which Russia is still a member, see less and less sense in their existence: oil prices are at multi-year highs, and there is no longer any point in cutting production when the market is in short supply. This is what the US administration wants to take advantage of by trying to convince the cartel leader Saudi Arabia, as well as the United Arab Emirates (UAE), to sharply increase oil production.

At the same time, sources close to the leadership of the kingdom note that Riyadh is still carefully calculating options, not wanting to quickly take sides. The agency notes that the authorities of Saudi Arabia specifically even sent Energy Minister Abdulaziz bin Salman al-Saud to the St. Petersburg International Economic Forum so that he “posed with Deputy Prime Minister Alexander Novak for joint photos.” Experts note that Riyadh is balancing between allies, trying to achieve the maximum benefit for itself.

At the previous meeting of OPEC +, the cartel, under direct pressure from Saudi Arabia, already increased production quotas for all members, but in reality only the kingdom itself and the UAE can actually increase production. The capacities that the two states can increase make up only 2% of global production, but even such volumes will be accepted by the world market with relief, since rising energy prices are one of the main reasons for sharp inflation around the world.

There is no unity within OPEC+ either: some delegates insist that quotas, the system of which was introduced back in 2016, must be abandoned so that those states that still have the opportunity to increase production can use it. However, such a scenario does not really suit Riyadh, whose representatives are sure that OPEC brings calm to the world oil market and it is not worth abandoning the existing interaction formats.

For the United States, an agreement with Saudi Arabia and the UAE would be an ideal solution to two problems at once. Russia will not only lose a significant part of its oil revenues, but will also lose its influence on OPEC and the oil market in general. The increase in the supply of oil in the market will help the US overcome the record inflation rate, which is currently a headache for the Biden administration.

At the same time, Russia itself has begun to lose its influence in the oil market. Due to pressure amid the invasion of Ukraine, Russia is forced to cut oil production. Based on the words of Alexander Novak, in the second half of 2022, oil production in Russia will face a real collapse, which calls into question the fulfillment of the obligations assumed under OPEC+.