link: https://www.aljazeera.com/economy/2021/1/5/oil-climbs-5-on-saudi-voluntary-oil-production-cut
Saudi Arabian officials announced on Tuesday that throughout February and March they will be making oil production cuts. These cuts are part of a deal made with the OPEC (Organization of the Petroleum Exporting Countries) and it’s allies to decrease oil production output on account of potential COVID lockdown demands. As a result of this news oil prices have already increased by five percent. Global benchmark Brent crude rose $2.51 making it $53.60 per barrel, and US benchmark West Texas Intermediate crude rose $2.31 leaving their price at $49.93 per barrel. Saudi Arabia made an additional cut of one million barrels per day in hopes of persuading all countries involved to stall their output of oil.
By cutting to one million barrels per day, it is evident of how powerful Saudi Arabia’s oil industry really is. This deal may have been made in the Middle East and most involves Middle Eastern countries, but make no mistake it will have a global effect. This could be good or bad for Middle Eastern countries depending on how COVID lockdowns play out, because if there is a high demand for oil then the high prices should bring in a good amount of income, but for certain countries like Kuwait (who’s economy is in a depression and heavily relies on oil distribution) it could only make things worse. I do not think it will have a longing effect on the Middle East or the oil industry as a whole because there will always be a demand for this product, and slowing down production may even help them preserve more oil.
For years countries in the Middle East such as Saudi Arabia have used geopolitics to gain control, and this is just another example of them using their power in the oil industry to conduct foreign policy. Since the Middle East is so rich in oil, and oil is such a vital resource globally; they have influence over most countries, like causing them to raise the prices of petroleum. By just acting upon potential lockdown orders to avoid over production of oil, Middle Eastern countries will geopolitically control petroleum prices globally, and that defines the concept of geopolitics in a nutshell.