China’s state-run Global Times propaganda outlet celebrated on Tuesday the oil cartel OPEC+ announcing a significant cut in its production the day before, claiming it as a victory against “U.S. hegemony” and a “stern warning” to America that it had lost global influence.
OPEC+ – a coalition of both OPEC members and non-members such as Russia, Mexico, and Kazakhstan – surprised global markets on Monday by announcing that it would reduce its collective oil output by 1.16 million barrels per day (bpd).
Saudi Arabia, widely considered the leader of the group, led the pack with a 500,000 bpd cut, while Russia extended an already existing 500,000 bpd cut through 2023. The cuts would begin in May, the organization confirmed.
The decision, somewhat unusually announced without the convening of an OPEC+ member meeting beforehand, followed remarks by U.S. Secretary of Energy Jennifer Granholm that the Biden Administration was not looking to imminently restore the supply in the country’s Strategic Petroleum Reserves (SPR) that it had depleted last year in an attempt to lower gasoline and diesel prices.
Granholm said it would take “years” to return the SPR supply to levels reached under former President Donald Trump and that it would be “difficult” for the United States to purchase more oil for the SPR in the short term.
Some analysts on Monday suggested that Granholm’s comments alarmed OPEC+ members, who expected America to increase global demand for oil by replenishing the reserves and thus keep oil prices stable. The Saudi and Russian governments both identified concerns about market “stability” as the reason for the production cut.
The Global Times blamed America for the production cut, but not necessarily due to the SPR situation. Instead, the Chinese government outlet more generally blamed “U.S. hegemony” for antagonizing the rest of the world and attempting to “manipulate other countries’ important policy-making” to “plunder” the world. Among the individual causes pointed to in the pages of the Global Times were the collapse of Silicon Valley Bank and American support for sanctions on Russia’s oil industry.
Notably omitted from the analysis was worldwide concern over China’s underperforming economy. Despite formally ending its “zero-Covid” lockdown and quarantine camp internment policies in December, economic activity and, in particular, oil demand in China, has not risen enough to undo the policy’s damage. Without sufficient demand from China, one of the world’s largest markets for importing oil, oil prices remain indefinitely suppressed.
The Global Times nonetheless blamed America entirely for OPEC+ limiting the world’s oil supply again.
“Observers said the move by OPEC+ constitutes a ‘gut punch’ to US hegemony amid the profound changes undertaking in the global geopolitical landscape, in particular in Asia,” the newspaper declared. “It also amounts to a reasonable defense of the victim countries of US hegemonic practices, ranging from abusing the dollar hegemony to monopolize bulk commodity market including petroleum, to instigating Russia-Ukraine conflicts for the purpose of making way for its own energy products in the European market.”
The “observers” and “analysts” quoted are, as is usual for the Global Times, Chinese professors, think tank fellows, and other regime-approved voices.
“The production cut should serve as a stern warning to Washington that irresponsible policies will only end up ‘shooting on its own foot,’ analysts said,” according to the Times, “while flagging that abrupt oil price climb-up could not only drain the US’ strategic oil reserves, exacerbate runaway inflation, prompt foreign capital fleet but also mire the Federal Reserve in a policy dead end.”
The state newspaper also assessed that the OPEC+ cut was a sign that “the capacities of Washington to manipulate other countries’ important policy-making are ‘going downhill,’ despite its trumpeted geopolitical tools in hands.” One of the newspaper’s analysts declared the move “the beginning of dismantling the U.S. hegemony.”
Li Haidong, a professor commonly featured in the Global Times pages, was quoted accusing the United States of “blackmail, stirring up crises and conflicts, wars, and hijacking international institutions such as OPEC … to keep the global crude market at its own use and as a tool for waging geopolitical struggle, rather than as a global public goods [sic].”
The state newspaper also cheered on Saudi Arabia for allegedly leading the effort in an attempt to divorce itself from America, its traditional ally.
“Seeing through the US role as a trouble maker in the region, Saudi has been adjusting toward a more balanced relation among its ties with major global powers,” Li said.
The Chinese Foreign Ministry reacted much more tamely to the OPEC+ production cut on Tuesday than the government’s top English-language media arm, failing to mention America but supporting the decision.
“Petroleum is a global commodity. It is vital to ensure the security of global energy supply and the stability of the oil market,” Foreign Ministry spokeswoman Mao Ning told reporters. “China is ready to maintain communication and strengthen cooperation with all parties including OPEC+ to keep the market balanced and stable in the long term.”
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