OPEC+ pauses output to keep the global economy shivering
By Caroline Ashford · Reporting from Richmond, Virginia ·
There is a particular kind of diplomatic language used in Vienna that is designed to sound like stewardship while functioning as a shakedown.
There is a particular kind of diplomatic language used in Vienna that is designed to sound like stewardship while functioning as a shakedown. When Haitham Al Ghais, the Secretary General of OPEC, describes the "stability and balance" of global oil markets as an "absolute priority," he is not speaking the language of a public servant. He is speaking the language of a man holding the thermostat of the global economy and deciding exactly how much we are allowed to shiver.
The High Cost of "Stability"
On Sunday, September 6, the core of the OPEC+ alliance—including Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria, and Oman—decided to keep oil production unchanged for October. As ABC Color reports, the group opted to maintain the production levels of September, effectively pausing the phased rollback of previous supply cuts. According to Asharq Al-Awsat, this decision comes amid the ongoing repercussions of the war with Iran and the resulting disruptions in the Strait of Hormuz.
To the casual observer, a "pause" sounds like a neutral act. But in the world of energy, a pause during a supply crisis is a choice to keep prices elevated. This is the same mechanism we saw during the original Oil Crisis of the 1970s: geopolitical conflict in the Middle East is used as a trigger to leverage output controls, allowing a producer cartel to dictate global price stability for its own benefit. The pattern is consistent: the cartel waits for a fire to start, then charges a premium for the water.
A Ledger Written in Betrayal
The most capable defenders of the cartel will argue that this is merely prudent management. They will point to Al Ghais’s forecast that global demand will rise to 124 million barrels per day by 2050, requiring a staggering $17.7 trillion in investment. They will claim that without these high prices, the capital necessary to fuel the future won't exist.
This argument ignores the rot inside the house. You cannot claim to be the adult in the room when your own members are fleeing. The United Arab Emirates left OPEC in May to increase its own supplies, and Iraq is currently bickering for a higher quota. This is not a disciplined alliance; it is a marriage of convenience held together by greed. We have seen this fragility before, most notably during the 2020 COVID-19 oil price war, when the "partnership" between Russia and Saudi Arabia dissolved into a race to the bottom. Like the 2011 Libyan Civil War, which turned a regional tragedy into a supply-chain weapon, or the 2022 energy crisis, today's "stability" is just a temporary truce between rivals.
The Tax on the Local
While the diplomats in Vienna discuss "baselines" for 2027, the real cost is paid at the local level. High energy costs are not mere statistics; they are a tax on the family firm, the parish bus, and the Friday-night gym. When the cost of diesel spikes because a cartel decided to "pause" production during a war, the local lumber yard in a town like Lynchburg feels it long before the bureaucrats in Washington do.
OPEC+ is spending the world's patience to fund their own sovereign whims. They treat the global energy supply as a political dial, turning it down to punish enemies or inflate their own coffers, all while wearing the mask of market equilibrium. They are not guardians of the future; they are speculators in a crisis of their own making.
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WTI crude oil price. Source: Federal Reserve Economic Data (FRED).