US-Saudi oil pact falls apart as Russia calls the shots

Just three years ago, when Opec+ oil giants fell out, the US found itself playing the role of peacemaker. Now it looks more like their target.

The Saudi-Russia oil alliance has the potential to cause all kinds of trouble for the US economy and even for President Joe Biden's re-election campaign. This month's Opec+ decision to cut crude output, for the second time since Biden flew to Saudi Arabia last summer seeking an increase, may be just the start.

That 2 April announcement has lifted oil prices by about $5 a barrel. Opec's own projections show that the cuts will widen the supply shortfall later this year. That means inflation will be higher, and recession risks are bigger than they otherwise would have been-because consumers spending more on energy will have less cash left for other stuff. Russian President Vladimir Putin, meanwhile, gets a bigger war-chest to fund his attack on Ukraine.

But more significant is what the Opec+move says about the likely path of oil prices over the coming years.