It is said that tensions in the OPEC + alliance may reappear with US President Joe Biden and will miss Donald Trump, who supports the oil production cut.
The U.S.’s diplomatic relations with OPEC’s de facto leader Saudi Arabia, and its members, Iran and Venezuela, to which it imposes sanctions, as well as with key non-OPEC producer Russia could be reshaped.
The strict enforcement of US sanctions on Iran and Venezuela prevents millions of barrels of oil from entering the market a day. If Biden relaxes measures, increased output and supply could make it difficult for OPEC to balance demand.
Biden said she would prefer multilateral diplomacy over the one-sided sanctions Trump imposed, but that may not mean sanctions loosening in a recent future.
Some are concerned that the returning Iranian volume may cause oversupply as sanctions on Iran’s oil exports loosen, and worried about Moscow’s continued participation in OPEC +.
Trump’s goal was to raise global oil prices as a contrary to prevent hundreds of thousands of job losses, and to avoid the US energy industry bankruptcies as the elections approach. He became an advocate of the oil and gas industry, withdrew environmental regulations and rejected the current that emissions are causing global warming.
Early in his presidency he criticized OPEC for demanding higher prices and invited members to increase production. Anti-OPEC US legislation known as NOPEC – first introduced years ago – was not enacted under his presidency, despite some momentum previously.
Trump has developed a close relationship with Saudi Arabia, the de facto leader of OPEC, on arms and protection against regional rivals such as Iran.
The OPEC + alliance has been raising oil prices since 2017 and there have been conflicts and developments that could weaken the market and threaten the future of the alliance.
Trump has worked more actively with OPEC on production decisions and the price of oil than the previous ones.
Biden seems to rely more on the professional advice of his advisors than Trump does.He is not expected to have an intimate relationship as Putin and Trump do.
Still, despite Biden’s comments on US-Saudi relations, it is unlikely that he will behave that radically.
Meanwhile, Iran must have welcomed Biden’s victory, but an expectation that the sanctions will be lifted quickly would not be true. Even if Iran’s sanctions were lifted, it would likely take two to four months for Iran’s oil exports to return to pre-sanction levels due to technical issues.
Therefore, OPEC + and its allies have enough time of period to decide on a new production quota.