After optimism prevailed about the direction of oil prices to decline since July 2022, due to expectations of a decline in global economic growth in 2022 and 2023, announced by the International Monetary Fund and other international institutions, the decisions of the OPEC Plus group came last Wednesday to raise oil prices in the market International and up to $93.3 per barrel for Brent crude, and about $87.7 per barrel for US crude.

However, the oil market took an opposite direction the day after the decisions of “OPEC Plus” yesterday, Thursday, prices fell slightly, and reached 93.1 dollars per barrel for Brent crude, and 87.5 dollars for American crude, before returning to rise again by the end of the week.

There are multiple readings regarding the decisions of OPEC Plus to reduce its oil production by about 2 million barrels, starting in November 2022, compared to what was required for production in August 2022.

This reduction represents 2% of the world's daily production of oil.

According to a statement by Saudi Energy Minister Abdulaziz bin Salman, the OPEC Plus decision to reduce production will extend until the end of 2023.

Some believe that the decision took into account the expectations of a decline in global economic growth during 2023, by 2.9%, according to what the International Monetary Fund mentioned in its report issued last July on the prospects for the global economy.


However, some believe that the production cut by OPEC Plus would lead to oil prices returning to the ceiling of $100 a barrel, or exceeding this ceiling, especially with the onset of the winter season in Europe.

This gave the OPEC+ decision momentum, and led to a more likely scenario for inflation in the global economy to continue its upward path;

American and European reaction.

At the American level, the Biden administration saw the decision as a clear challenge to it, while the European Union moved to approve the eighth package of sanctions against Russia, which included imposing a ceiling on the price of Russian oil.

Immediately, the Russian Foreign Ministry responded that Russia would refrain from selling its oil to countries that support or accede to the European Union's decision to set a ceiling on its oil prices, and accused European countries of being short on market freedom.

America's options

Some believe that the OPEC Plus decision came to maintain oil prices in the international market at rates ranging between 85 and 95 dollars per barrel, in order to preserve the financial capabilities of the oil-producing countries, and to anticipate any situation that could cause a sharp decline in prices, as happened in the wake of the crisis. Global financial 2008 when oil prices collapsed and reached 30 dollars a barrel.

On the other hand, another opinion holds that the decision of OPEC Plus is announcing the emergence of a multipolar world order.

It appears that the alternatives are in front of America, to compensate for the deficit resulting from the decision to reduce production by OPEC Plus;

It may be the resort to Venezuela as soon as possible and the lifting of sanctions against it, and the entry of its oil fields for production, which is what was mentioned in the media.

America can also expedite the conclusion of its nuclear agreement with Iran, and achieve more calm in Libya and other conflict areas, which are oil or gas production areas, in order to increase the oil supply in the international market, and thus calm prices.


The apparent stagnation at the global level may be an opportunity for America and Europe to take a breath and arrange files in the energy field, and confront the Russian challenge, or the current “OPEC Plus” bloc.

European efforts to confront the crisis

Since the outbreak of the Russian war on Ukraine, Europe has been seeking to use the oil and gas card by Moscow in managing its conflict with America and Europe;

To have a collective management.

There are steps that have been taken to rationalize energy consumption in Europe, in addition to reviewing the steps taken to dispense with fossil energy (oil, gas, and coal) and thinking about returning to the nuclear energy option, in order to provide for Europe's fuel needs, and to meet the Russian challenge.

In a step worthy of the decision-maker in light of crises, Britain and the Netherlands tended to impose a ceiling on energy prices in both countries for consumers, in order to ensure the stability of their economic and social conditions.


Winners and losers

The current energy crisis - as one of the economic crises - shows the clear disparity in the performance of the economies of Arab countries.

At a time when the financial indicators of the Arab oil-exporting countries have improved - with the upward trend of crude prices in the international market, since August 2021, the OPEC Plus decision came to push prices in the international market towards a further rise, or maintain them within the range of $85 a barrel in average, which is a satisfactory result for these countries.

On the other hand, these countries will pay the bill for the high rates of inflation in the international market, as they are importing countries for many of their needs, but the difference will be in their favor in light of the continued rise in oil prices.

On the other hand, those affected in the Arab region will be those oil-importing countries, whose budgets will bear double negative effects, on the one hand, in terms of an increase in the bill of crude imports and other goods, and that citizen who faces increasing burdens of living, without appropriate social protection programs, and another to reduce the wage gap and prices.

The crisis will have a more severe impact on the Arab countries that suffer from economic crises and have pending programs for financing from the International Monetary Fund.

Energy prices in global markets may be one of the items that the governments of those countries will resort to to raise prices locally, which means increasing the cost of producing goods and services for the citizens of these countries.