A Crude Shock for the West
Massive production cuts by OPEC+ would strengthen Saudi Arabia’s global economic position while damaging the West.
Welcome to World Brief, FP’s new flagship daily newsletter.
Welcome to World Brief, FP’s new flagship daily newsletter.
Today, OPEC+ grants Saudi Arabia an oil win, Finland elects a new prime minister, and Israel’s far-right firebrand fights for his own national guard.
Saudi Arabia’s Oil Win
A trip to the gas pump may soon come with sticker shock after OPEC+ announced another set of cuts to oil production on Sunday. Starting in May, the oil cartel—led by Saudi Arabia and Russia—will slash output by 1.65 million barrels a day in a bid to push up the global price of crude.
The announcement comes amid a crucial shift in the global economy: Beijing’s decision to lift zero-COVID restrictions brought its sizable market back online, increasing demand for crude. This created an opportune moment for OPEC+ nations to raise oil prices, said Raad Alkadiri, managing director of energy, climate, and resources at Eurasia Group.
Crude prices were also beginning to settle after last month’s banking crisis led many hedge funds to fear they were risky assets and sell their oil shares. OPEC+ hopes cutting production will reverse weeks of macroeconomic uncertainty.
But not everyone is happy with the decision—especially in Washington, where the Biden administration is concerned the move will cause gas prices to rise at home and harm efforts to curb high inflation around the world. Central banks are struggling to rein in inflation without raising interest rates—particularly in Europe, which could be facing a looming recession in the coming months.
It’s also yet another sign of the increasingly rocky relationship between the United States and Saudi Arabia. Riyadh has refused to cut ties with Moscow over its invasion of Ukraine, undermining the effectiveness of Western sanctions on Russia. Against U.S. wishes, the cartel announced in October 2022 that it would cut its output by 2 million barrels of oil a day. In response, the United States partially drained its Strategic Petroleum Reserve to support Ukraine and keep oil prices in check.
Last week, however, President Joe Biden said it could take “years” to refill the reserve, meaning the West’s biggest powerhouse has little ammunition left. “They basically used all the bullets they had last year,” said Livia Gallarati, a senior analyst at Energy Aspects. “Now, they’re left with little to nothing that they can do to counterbalance the impact of the OPEC production cuts.”
But it’s the major oil importers in less developed parts of the world that are expected to bear the brunt of rising petrol prices. Alkadiri predicts Pakistan in particular, which is already struggling with a severe energy crisis, could face significant financial pressure.
Sunday’s Most Read
• China Has Been Waging a Decades-Long, All-Out Spy War by Calder Walton
• Israel Is Somewhere It’s Never Been Before by Aaron David Miller and Daniel C. Kurtzer
• Biden’s State Department Needs a Reset by Stephen M. Walt
The World This Week
Tuesday, April 4: U.S. Secretary of State Antony Blinken holds a bilateral meeting with Ukrainian Foreign Minister Dmytro Kuleba in Brussels.
G-7 trade ministers meet virtually.
Wednesday, April 5: Ukrainian President Volodymyr Zelensky visits Poland.
Wednesday, April 5, to Saturday, April 8: French President Emmanuel Macron visits China.
Thursday, April 6: Russian President Vladimir Putin and Belarusian President Aleksandr Lukashenko meet.
What We’re Following
Helsinki’s electoral twist. Finland’s ruling party suffered a bitter defeat, with Prime Minister Sanna Marin losing to center-right former Finance Minister Petteri Orpo in Sunday’s election. Orpo’s National Coalition Party secured 20.8 percent of the vote, compared to the 19.9 percent won by Marin’s Social Democratic Party. Candidate Riikka Purra’s populist Finns Party won 20.1 percent, a record for the right-wing group.
Marin garnered international attention after securing the top post in 2019 at the age of 34. As the country’s youngest leader in history, Marin won praise at home and abroad for successfully navigating the COVID-19 pandemic, Russia’s invasion of Ukraine, and Finland’s NATO accession bid—set to be officially signed on Tuesday. However, she faced political embarrassment in the summer of 2022 when video of her out partying and drinking with friends surfaced. She also failed to keep her party together on key Indigenous rights legislation, journalist John Last wrote for Foreign Policy.
In contrast, Orpo is known for his handling of the 2015 migrant crisis while internal minister. He campaigned on tax and spending cuts, notably to welfare programs like unemployment benefits, as well as reducing public debt. Speaking to journalist Emily Schultheis for Foreign Policy, Orpo said he’d be willing to work with the other candidates in building a potential coalition—if significant policy differences were overcome first.
Moscow arrests Russian dissident. Authorities detained a 26-year-old anti-war activist suspected of being involved with Sunday’s bombing in St. Petersburg, Russia, which killed a pro-Russia blogger. Around 30 people were injured in the blast. Moscow blamed Ukrainian intelligence as well as agents linked to Russian opposition leader Alexey Navalny for the attack—without providing evidence.
The Kremlin’s announcement indicates Moscow may begin to further crack down on Russian dissidents in the coming days. Since its invasion of Ukraine, Russia under President Vladimir Putin has engaged in intense disinformation and propaganda campaigns to combat the West.
Justice comes to Kosovo. Former Kosovar President Hashim Thaci begins his trial at a war crimes tribunal in The Hague on Monday. He stands accused of committing more than 100 murders—from executions to the deaths of mistreated prisoners—during Kosovo’s 1998-1999 war of independence against Serbia. Thaci pleaded not guilty.
The guerrilla leader targeted enemies of the Albanian Kosovo Liberation Army during his reign. Thaci, along with three other men, each face six counts of crimes against humanity and four counts of war crimes.
Israeli National Security Minister Itamar Ben-Gvir may be the only member of the country’s current government to have secured an even stronger political position from Israel’s recent turmoil. On Sunday, Israel’s government approved his call to form a new Israeli National Guard within the National Security Ministry.
The far-right politician is known for pushing Jewish supremacy and anti-Arab racism within Israel’s Religious Zionist Party. He has endorsed increasing Israeli settlements in the West Bank and sparked anger in January after making a controversial visit to the Temple Mount/al-Aqsa Mosque complex in Jerusalem, a site sacred to both Jews and Muslims. He has also been convicted multiple times for incitement and supporting a Jewish terrorist group.
Now, critics of Ben-Gvir, such as former police chief Moshe Karadi, worry that the national guard, if under Ben-Gvir’s direct control, will act as his personal militia and could be used to instigate a coup. A committee composed of the country’s security agencies and the relevant government ministries is expected to discuss the “responsibilities of—and control over” the new force and submit its recommendations to the cabinet within 90 days, according to a government press release.
Odds and Ends
It seems the French have found the one thing they can all agree on: banning scooters. Parisians voted to outlaw electric scooters in the capital on Sunday, with an overwhelming 90 percent of votes in favor of the law. Now, if only they can come together on issues like pension reform.
Alexandra Sharp is the World Brief writer at Foreign Policy. Twitter: @AlexandraSSharp
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