The 13-member Organization of the Petroleum Exporting Countries and its allies, which include Russia, voted to cut its production target by 2 million barrels a day last week, despite global supplies being seen as tight.
The government of Joe Biden He harshly criticized the decision and took aim at Saudi Arabia, the world’s largest crude exporter, for lining up behind Russia’s wishes. “The Saudi foreign ministry may try to misrepresent or divert (attention), but the facts are simple. The world is lining up behind Ukraine to combat Russian aggression,” said the White House National Security Council spokesman, John Kirby.
“In recent weeks, the Saudis have made it clear to us, privately and publicly, that they intended to cut oil production, knowing that this would increase Russia’s revenue and lessen the impact of sanctions (against Moscow for the war). This is the wrong direction,” he said.
Putin quoted Friedman
Faced with the onslaught of the United States, the Russian president appealed to a quote from the economist to argue the decision to cut production. Friedman was a renowned American theoretician, advisor to the governments of Ronald Reagan in the US and Margaret Thatcher in the UK. Critical of John Maynard Keyness’s proposal, he was one of the founders of the Chicago School of Economics, the base of the neoclassical current that promotes the free market.
“I would like to quote the American economist, Nobel Prize winner Milton Friedman. ‘We economists don’t know much, but we do know how to create a shortage. If you want to create a shortage of tomatoes, for example, simply pass a law that retailers cannot sell tomatoes for more than two cents a pound. Instantly there will be a tomato shortage. The same happens with oil or gas.. Let me remind you that Milton Friedman passed away in 2006 and had nothing to do with the Russian government and can no longer be labeled a Russian influencer,” he said.
The leader of the Russian Federation did not hesitate to agree with Friedman’s statements when pointing out that “These seem to be universal facts.” However, he criticized “the leaders of some nations and their bureaucratic elite” who “ignore these obvious factors.”
From the US they argue that a report was presented to the Saudi monarchy that showed that there was no market basis to reduce oil production before OPEC +’s decision to lower supply.
Of those cuts, experts expect a real output decline of about half that level.
OPEC+’s decision was made by consensus, took into account the balance of supply and demand and was aimed at curbing market volatility, the Saudi Foreign Ministry said in a statement on Thursday.
Source: Ambito
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