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According to Nikkei: Japan and the European Union have drawn up an agreement on a satellite network plan.Slovak Prime Minister: We aim to reach an agreement with EU partners on stopping Russian gas supplies and sanctions package by Tuesday.July 12, Anthony Saglimbene, chief market strategist at Ameriprise Financial, said that as the US government reaches an agreement with trading partners such as Japan and South Korea in the coming weeks, most investors seem to expect the United States to avoid raising tariffs. "This is the expectation that the market has formed," Saglimbene said. "If we dont get such an outcome, then I think if the White House does implement some aggressive tariff measures, the market volatility in the short term may increase."Ukraine said Russia launched 623 drones and missiles during the night.July 12, according to a report by the Wall Street Journal on the 11th, US President Trump hinted that if Iran seeks to develop nuclear weapons, he will support Israel in launching a new round of strikes against Iran. According to reports, Israeli Prime Minister Netanyahu recently privately informed Trump that if Iran resumes the development of nuclear weapons, Israel will launch further military strikes against Iran. Trump responded that he was inclined to reach a diplomatic settlement with Iran, that is, to reach an agreement on the nuclear issue, but he did not oppose Israels plan. The report also stated that a senior Israeli official revealed that Israel would not necessarily seek explicit approval from the United States on the issue of resuming strikes against Iran. However, considering that the United States seeks to maintain diplomatic ties with Iran, Israel may also face resistance from the United States.

OPEC Departures - Those Who Escaped (actually four)

Alina Haynes

Nov 04, 2022 17:41

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Beginning this week, we will investigate OPEC dropouts, the worldwide group intended to control oil prices and protect its members' energy interests - primarily against private oil corporations. Ecuador, Indonesia, Gabon, and Qatar are the four OPEC members who have suspended or cancelled their memberships since the organization's inception in 1960.

 

Even though it is an energy-related institution, its impact extends to both the market and geopolitics. The most obvious example would be the energy crisis of the 1970s, which was created by a crude oil embargo imposed on the west as punishment for its backing of Israel. Inadvertently, this promotes energy security for western nations, driving the United States to become the world's greatest oil producer.

 

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How Powerful Is OPEC?

In an effort to stabilize oil prices and protect national interests, OPEC has reduced daily crude oil output quotas (not actual production) by two million barrels. Since the October announcement, oil bulls have regained their power. WTI oil futures were trading at $88.59 per barrel as of 2 November, and Brent oil futures were trading at 94.72 per barrel - an increase of nearly $10 in less than a month.

 

By controlling around 40% of world oil output and 80% of global oil reserves, the Organization of Petroleum Exporting Countries (OPEC) has been able to influence the market and even international relations. If so, why would its members choose to quit, especially in the twenty-first century, when many nations are undertaking energy transformation and diversification and (public and private) oil producers are gaining less positive public images and becoming less sustainable?

Why Depart? 

OPEC acts in a manner comparable to that of a labor union, earning bargaining leverage and financial gains by collective action/stance. But when the costs outweigh the benefits, it makes sense to depart. In this instance, Ecuador claimed fiscal issues as the reason for its second official withdrawal from OPEC. The country's economy has struggled for decades. It claimed that the OPEC production quota and the membership fee of two million dollars created major financial restraints.

 

As the Russian invasion of Ukraine continued, the market opportunity given to oil-producing nations by rising energy costs became more alluring. However, OPEC members were required to adhere to the output quota, and oil-dependent nations were placed in a disadvantageous situation. Low-producing nations, such as Ecuador, were eclipsed by major producers, such as Saudi Arabia, due to the disparity in output levels.

 

Complex political subtleties among OPEC members have also given rise to discontent. The departures of Qatar and Indonesia can be partially ascribed to geopolitical issues, especially those that occur beyond their borders. Stay tuned as we discover more about the oil-producing nations in the periphery.