President Biden failed in his discussions with KSA to reduce oil prices to deprive Russia of oil revenues. It is worth noting that the reduction in oil prices affects the US dollar positively. However, the failed discussions are showing the growing gap between the USA and the gulf countries.
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As winter approaches, OPEC+ decided, on October 5th, to reduce its output by 2 million barrels per day, which is 2% of the global supply. This decision will result in soaring prices that will mainly benefit Middle Eastern countries since Russia is under an energy embargo.
The last time OPEC+ announced the reduction of its output was at the beginning of the pandemic. Currently, the EU’s embargo on Russian energy and the tense relations between Saudi Arabia and Western countries, namely, the USA, are the reason behind this cut in production. This complex situation highlights some states’ dependency on others in terms of energy.
This action will increase inflation, especially in Europe which needs to replace Russian gas. The region between India and Japan fights rising costs of living, in particular Sri Lanka.