On the Proposed Cuts to Oil Production and Strategic Autonomy of OPEC+ Nations

November 08, 2022

About the author:

Brian Wong Yueshun, Ph.D. candidate, Oxford University; Columnist, Hong Kong Economic Journal; TI Youth Observer


Earlier this month, members of OPEC+ – a group of economies who control over more than 80% of the world’s oil supplies1 – declared that from November onwards, they would cut their volume of oil exports by two million barrels per day.2 The announcement came hot on the heels of an ongoing inflationary spiral across Europe and the United States, induced by a combination of factors that include the Russian war in Ukraine and broader supply chain disruptions under the pandemic.3 It is evident that such constrictions in the supply of energy and oil, paired with an increasingly unpredictable climate during the coming winter, may result in surging energy prices as countries across the Northern Hemisphere brace for the months ahead.


The following article argues that OPEC+ economies’ decision to cut oil production is both a product and indicative of the strategic autonomy of middle and regional powers such as Saudi Arabia, Iraq, and Iran. Here, strategic autonomy refers to a concept borrowed from the EU’s self-identification (see Erlanger’s extensive exposition for a fuller picture as to what it means in the European context)4 of states pursuing their national interests through maintaining a healthy distance, independence, and degree of flexibility vis-à-vis other, potentially larger powers. 


One further clarification: the argument advanced is not so much an appraisement of the moral worth of OPEC+ economies (e.g., are they ethical or justified?), rather than a claim that one cannot underestimate the fundamental resolve and capacity of these so-called “middle powers” to behave in ways that advance their own self-interests, as opposed to some lofty, abstract higher principles. Those who find themselves surprised by the resolve of the Gulf, African, and Latin American countries to withhold oil production, may well benefit from a more robust understanding of how diplomatic dexterity could be wielded by governments and politicians of powers with prominent leverage in strategically vital dimensions. Indeed, one such dimension would be energy production and supply, where there exists a high level of mutual interdependence across countries. 



On NATO-OPEC+ Relations: Pivoting Away from Mutual Dependence 

Historically, relations between most of the member states in OPEC+ and NATO member states, particularly the United States, had been those of mutual dependence. European states directly depended upon OPEC+ economies for oil supply, whilst the United States – despite being a more energy-self-sufficient nation5 – not only remains a significant consumer of OPEC+ oil, but is also indirectly dependent upon the latter states’ compliance on the consideration of its geopolitical objectives. Notwithstanding the undergirding ideological divergences and marginal mistrust between selected members of the two respective alliances, NATO states have historically been able to import relatively concessionary and stable supplies of (crude) oil from OPEC+ members. 


This was no less anchored by Washington’s proximate and intense relations with Riyadh – the House of Saud had been highly supportive and aligned with American foreign policy objectives, in exchange for tacit American support for its continued right to rule and counterbalance against Iran. This was especially the case throughout the final quarter of the 20th century, all the way through to the early years of the American war in Iraq. In turn, OPEC+ states turned to NATO members for security guarantees, economic aid and loans, pledges to collectively combat security challenges (e.g., piracy in East Africa), and broader alignment or condonement in geopolitical terms. For its part, the proverbial West had opted to maximize their access to readily available energy sources through withholding criticisms of human rights abuses and problematic regime behaviors – ostensible or otherwise – exhibited by many amongst the OPEC+ members. 


Much of this has changed in recent years.6 Despite President Joe Biden’s visit to Saudi Arabia in July, which was accompanied by an intimate face-to-face meeting between Biden and Saudi Crown Prince, Mohammed bin Salman, none of such diplomatic efforts succeeded in convincing the leading voice in OPEC+ to refrain from advocating the vast undercutting of oil production. The net outcomes are a grossly panicking energy market, broader discombobulation amongst many investors and consumers, and concerns over hyper-inflation as winter approaches. The war in Ukraine had meant that the U.S. could no longer rely upon Russia and its direct allies for energy; the obstinacy (or resilience) of Middle Eastern players in face of American pressure, is hence indicative of not just the headwinds shifting against the U.S., but also the rising autonomy of OPEC+ nations in relation to American hegemony. 



Accounting for the Seemingly Implausible: The Underlying Rationale for the Pivot

A superficial explanation for the recent decision may be one rooted in straightforward economic interest. Energy, especially in the form of oil, is a fundamentally inelastic demand that few could make do without; to skip oil and natural gas, in favour of alternatives such as renewables, would be admirable albeit futile given the present state of technology.7 OPEC+ countries are well-cognizant of this fact – indeed, raising prices would be in their interests, maximizing their profit margins, whilst the rest of the world reels from the whiplash of the economic turmoil accumulated over the past few years. Price gauging over vital resources does often work – and is embraced as such.


Yet such economic explanations are only half-successful – after all, they do not explain the timing, e.g., why it is only now that OPEC+ countries opt to openly and vocally declare their high-price, high-revenue strategy? It is equally unclear as to why Saudi Arabia has steadily drifted away from the U.S. on fronts ranging from economic cooperation to energy synergy since the halcyon days of relations during Trump’s years.8 A more complete explanation, then, is that there are both geopolitical and economic factors at play here. In face of the unfolding situation in Ukraine, the hypothesis advanced by some in NATO – that a regime change in Russia should be the primary goal of the Western advances and support for Ukraine – may have convinced political elites and decision-makers in countries inimical to the so-called “Western values,” that they must guard against the “peaceful transition” rhetoric espoused by many.9


Therefore, a more comprehensive story is that such regional and middle powers, in their quest to ensure internal stability over time, sought to repudiate the Western assertion that Putin must be replaced and Russia’s government overhauled. More precisely, there is the worry that if OPEC+ states had acquiesced fully to NATO’s demands concerning oil production, not only would this indirectly encourage the prolonging of the military conflict; it would also have sent out a clear and unambiguous signal of submission to NATO’s edicts – which by no means aids with domestic credibility and legitimacy. It was perceived by national leaders that only through adhering firmly to principles of non-alignment that OPEC+ states could come to both reap the benefits of expensive oil sales, whilst maintaining reasonably robust ties with both China and the United States. When seen through such lenses, then, the behaviors of the OPEC+ are not only understandable, but even rational.


Certain commentaries tend to portray the Gulf States as having been subjected to the “overtures” of Russia10 – as if there had been little to no agency on the part of these Middle Eastern (but also North African) states to determine whether they would indeed align with Moscow. Yet such diagnoses commit two fundamental errors – first, they take as their methodological default a copious volume of Western-centrism, e.g., such commentaries assume that shifts away from alliances or partnerships with the West (to the extent they even existed to begin with) are innately unnatural; second, they unduly discredit and neglect the agency of leaders in OPEC+ economies in deciding over their foreign policies. A more amorphous and dexterous foreign policy is understandable – given that Russia has been a long-standing member of OPEC+, and China has offered substantial trade and investment opportunities for OPEC+ firms and governments over recent years. To portray this all as the products of “encroachment” by non-Western countries reflects a certain kind of foundational arrogance. 



Towards a Cogent Account of OPEC+ Nations’ Strategic Autonomy – and Its Effects 

The strategic autonomy of OPEC+ nations stems from a particular feature that they, unlike most other countries on Earth, possess: access to an abundance of resources, with the supply and availability of such resources effectively determined by a small group of individuals. Their possession of such resources grants them not only bargaining power vis-à-vis larger states, but also the defensive mechanisms in place to preserve their ability to pursue their own paths in terms of international alliances and relationships. 


What are the implications of such autonomy then? One view is that it would be used to support the protraction of the Russian war in Ukraine, to the point where Europe would be triply ravaged by a harsh winter, soaring energy prices, and military escalation in Ukraine. This could turn out to favor Putin, who needs his military offensive to not only last throughout the winter, but ideally to enable him to apply pressure on Central and Eastern European states to come to the negotiation table.  


Of course, the bargaining capital should not be overstated – on October 24, gas prices dropped to below 100 euros per MWh, a first since June and slightly above a quarter of the peak in August.11 The runway for bargaining could well be precipitously shortened as Europe and the United States alike come up with alternative and safer sources of energy. Additionally, Saudi Arabia is also mindful of the United States’ prospectively doubling down on Israel as a more substantial regional partner;12 whilst Saudi Arabia and Israel share a recently forged, tentative alliance of convenience against Iran, the two states remain fundamentally skeptical of each other’s intentions.13


A more substantial effect is that the OPEC+ states’ decision to cut oil supply may well have been the trigger of the European-American economic machine into deepening and strengthening its green and renewable energy research – which could prove to be pivotal as the Earth races against time in identifying and harnessing alternative resources of energy. Peak oil and gas are indeed looming over the horizon – and it is vital for non-OPEC+ states to have access to the kind of entrepreneurship and legal protection afforded to OPEC+ states over energy policy. Whether the EU can play truly adequate catch-up, however, remains to be seen. 


Most fundamentally, it is clear that as the world shifts progressively towards a more unstable and perhaps eventually multipolar order, what is required of us is level-headedness and cautious sanguineness. This would enable us to juggle the multitude of interests that make up our community, and beyond. The selective wielding of strategic autonomy allows for the creation of alternative bases for power, but also introduces greater instability and a culture of entropy. Yet if there is one fact that cannot and should not be dismissed, it is that middle powers with sizeable regional influence can and must step up to play a greater role in not just surviving, but mediating crises that befall our planet.



1. “OPEC Share of World Crude Oil Reserves”, OPEC, https://www.opec.org/opec_web/en/data_graphs/330.htm

2. “Petrol price rise warning after Opec oil output cut”, BBC, https://www.bbc.com/news/business-63149044

3. “Annual inflation up to 9.9% in the euro area”, Eurostat, https://ec.europa.eu/eurostat/documents/2995521/15131946/2-19102022-AP-EN.pdf/92861d37-0275-8970-a0c1-89526c25f392

4. “Coronavirus Tests Europe’s Cohesion, Alliances and Even Democracy”, New York Times, https://www.nytimes.com/2020/03/12/world/europe/coronavirus-eu-trump.html

5. “Surprise! The U.S. Is Still Energy Independent”, Frobes, https://www.forbes.com/sites/rrapier/2022/03/08/surprise-the-us-is-still-energy-independent/

6. Mohamad Bazzi, "Saudi Arabia has screwed over the US – and the world – yet again. Enough is enough”, The Guardian, https://www.theguardian.com/commentisfree/2022/oct/13/saudi-arabia-us-oil-prices-opec

7. “How Do Supply and Demand Affect the Oil Industry?”, Investipedia, https://www.investopedia.com/ask/answers/040915/how-does-law-supply-and-demand-affect-oil-industry.asp

8. Saphora Smith, Dan De Luce, “U.S.-Saudi ties were especially close under Trump. Under Biden, that looks likely to change”, NBC News, https://www.nbcnews.com/news/world/less-privileged-personal-how-u-s-saudi-ties-may-soon-n1247439

9. Arthur Waldron, “In China: ‘A Peaceful Democratic Transition?’”, Foreign Policy Research Institute, https://www.fpri.org/2015/03/in-china-a-peaceful-democratic-transition/

10. “A ‘pivot to Asia’”, The Frontier Post, https://thefrontierpost.com/a-pivot-to-asia-2/

11. Ross Clark, “Why are Europe’s gas prices falling?”, The Spectator, https://www.spectator.co.uk/article/why-are-europe-s-gas-prices-falling-

12. Barak Ravid, “U.S. and Israel launch high-level tech talks, with an eye on China”, Axios, https://www.axios.com/2022/09/28/us-israel-technology-cooperation-china

13. Bruce Riedel, “How to understand Israel and Saudi Arabia’s secretive relationship”, https://www.brookings.edu/blog/order-from-chaos/2022/07/11/how-to-understand-israel-and-saudi-arabias-secretive-relationship/



Please note: The above contents only represent the views of the author, and do not necessarily represent the views or positions of Taihe Institute.


This article is from the October issue of TI Observer (TIO), which is a monthly publication devoted to bringing China and the rest of the world closer together by facilitating mutual understanding and promoting exchanges of views. If you are interested in knowing more about the October issue, please click here:





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