This article supplied by Troy Media.

By Rashid Husain Syed

Riyadh is walking away from its role as oil market stabilizer, signalling a return to market-share battles that threaten prices and Canadian revenues

After boosting crude oil output by 411,000 barrels per day (bpd) in May—triple the originally planned volume—OPEC+ shocked observers by intending to repeat the increase in June, despite slowing global demand and the dampening effects of U.S. trade tariffs.

The decision has ripple effects far beyond the Middle East. OPEC+—the alliance of the Organization of Petroleum Exporting Countries and allies such as Russia—collectively controls about 40 per cent of the world’s oil production. Its actions directly influence global oil prices, which in turn affect everything from gasoline prices across Canada to government revenues in resource-dependent provinces like Alberta.

Is OPEC+ sabotaging itself?

The move contradicts the group’s modus operandi of the past several years. Since 2016, OPEC+, led by Saudi Arabia, has tried to balance global oil markets by curbing output. At its peak, the group cut production by more than five million barrels per day—about five per cent of global supply—with Saudi Arabia alone contributing two-fifths of that total.

This strategy was meant to stabilize prices and ensure petrostates such as Saudi Arabia could meet ballooning budget demands. Many OPEC members remain heavily reliant on oil revenues to fund government spending, with few alternative income streams.

But after years of shouldering the burden, Riyadh appears to have had enough. Reuters recently reported that Saudi officials have been quietly telling allies and industry experts the kingdom is no longer willing to continue absorbing the cost of propping up global prices through deeper cuts.

There is logic behind this frustration. Despite OPEC+ efforts, markets remain volatile. Crude has dropped about 19 per cent this year, briefly touching a four-year low, mainly due to fears that U.S. tariffs will reduce global energy demand.

Some of this instability can be traced to cheating within OPEC+. Several members, including Iraq, Kazakhstan and Russia, have regularly exceeded their quotas, often at Saudi Arabia’s expense.

Riyadh’s patience appears to have run out. “OPEC’s decision framework appears to be fueled by persistent cheating,” noted TD Cowen strategists Dan Ghali and Bart Melek. The group warned in a note to clients that inventories could rise by 200 million barrels in the next three quarters, potentially pushing crude prices into the low US$50 range.

Saudi Arabia has no intention of sacrificing more market share to cover for others. This echoes an earlier episode when former Saudi oil minister Ali AlNaimi, frustrated by similar quota violations and the rise of U.S. shale producers, chose to flood the market to protect Saudi interests. In 2016, he famously told American drillers they could “lower costs, borrow cash or liquidate” as prices sank below US$50 per barrel.

The result was carnage in the oil patch—and a temporary ceasefire among producers.

History may be repeating itself. With other OPEC+ members again failing to meet targets, sources told Reuters that Riyadh is now shifting strategy. Rather than continuing to play the role of swing producer, Saudi Arabia may focus on regaining market share by boosting production, effectively stepping back from the group’s five-year effort to balance prices.

Despite its dependency on oil revenues, the kingdom appears ready to endure lower prices. Media reports quoting government sources suggest Saudi Arabia may increase borrowing and scale back spending to compensate. “The Saudis are ready for lower prices and may need to pull back on some major projects,” one insider told Reuters.

Saudi Arabia needs prices above US$90 per barrel to balance its budget—a higher threshold than other major producers such as the United Arab Emirates, according to the International Monetary Fund (IMF).

Theories abound about the motivations behind the kingdom’s apparent policy shift: retaliation against quota-busting allies, competition with emerging producers like the United States and Guyana, or even an attempt to please U.S. President Donald Trump, who has publicly called for higher OPEC output to ease gasoline prices.

Whatever the motivation, the consequences are real. The IMF has lowered its economic growth forecast for oil-exporting Middle East countries to 2.3 per cent from four per cent projected in October, citing lower prices and rising geopolitical uncertainty. It also revised Saudi Arabia’s growth outlook to three per cent from 3.3 per cent after oil prices fell 13 per cent in the past month alone. This has implications far beyond the Middle East, including for Canada. For Alberta, where oil sales remain a pillar of the economy, weakening global prices mean reduced royalties, tighter fiscal planning and less room for public investment.

As global oil markets enter another uncertain chapter, the aftershocks will be felt from Riyadh to Edmonton.

Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.

Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country.

From the Daily Caller News Foundation

By AUDREY STREB

“A lot of the push to keep these subsidies alive isn’t about good energy policy — it’s about keeping industries afloat that can’t meet reliability and affordability standards on their own.”

Energy Secretary Chris Wright said on Friday that his agency plans to cut billions in grant funds for Biden-era loans as the Trump administration conducts a review of the department’s $400 billion clean energy investments, a decision that energy policy experts who spoke with the Daily Caller News Foundation cheered on.

Before leaving office, former President Joe Biden squeezed $25 billion into the Department of Energy’s (DOE) Loan Programs Office (LPO) for various projects, with the bulk of the funds going toward renewable energy development. Wright’s newly announced plans to review and cancel a majority of the loans has the backing of several energy policy experts who told the DCNF that the LPO has stripped cash from taxpayers and contributed to U.S. grid instability.

“We’ve got a lot of reasons to be worried and suspicious about that,” Wright told Bloomberg in response to a question about the LPO. “Some of these loans will go forward, some of it, it’s too late to change course. A lot of them won’t go forward, but that’s a very careful review process that we’ve just put in place and just got a team to execute on.”

The LPO has previously dished out loans for nuclear energy, an industry championed by the Trump administration. However, among the loans finalized after the election were $6.57 billion to an electric vehicle manufacturing facility in Georgia and $289.7 million to solar energy development and battery storage in Massachusetts.

“[The LPO] may have been well-intended, but it’s morphed into a clean energy slush fund that dooms energy projects by making them tied to federal funding,” Gabriella Hoffman, the director of the Center for Energy and Conservation at Independent Women’s Forum wrote to the DCNF. “LPO investing currently undermines competition and market innovation of energy technologies. In the event it stays, however, it must be radically reformed to not prop up reliable energy sources like solar and wind.”

Notably, the rush to get these loans greenlit under Biden prompted a November inspector general report, which highlighted several potential risks to taxpayers related to the LPO, including concerns that the office may be moving too quickly to distribute funds, possibly at the expense of properly vetting loan applicants.

Other noteworthy projects approved under Biden’s watch included a $2.5 billion in loan for EV technology, 1.45 billion for a solar manufacturing facility in Georgia and $584.5 million for a solar photovoltaic (PV) system with an integrated battery energy storage system in Puerto Rico.

Founded in 2005, the loan office was created to help advance clean energy infrastructure, and it was increasingly active under the Obama administration, which approved a $535 million loan to Solyndra, a green energy company that collapsed just two years later. Activity slowed during President Donald Trump’s first administration, but under Biden, the office received a massive funding boost from Congress — totaling $400 billion — to support green tech firms.

“These past four years have been the most productive in LPO’s history,” LPO wrote in a fact sheet three days before Trump returned to the White House. “Under the Biden-Harris Administration, the Office has announced 53 deals totaling approximately $107.57 billion in committed project investment – approximately $46.95 billion for 28 active conditional commitments and approximately $60.62 billion for 25 closed loans and loan guarantees.”

“If the government’s going to use my money as a taxpayer through LPO investments, that money should be going to investments that actually provide reliable power,” André Béliveau, senior manager of energy policy at the Commonwealth Foundation told the DCNF. “A lot of the push to keep these subsidies alive isn’t about good energy policy — it’s about keeping industries afloat that can’t meet reliability and affordability standards on their own.”

While the majority of the LPO’s support in Congress and the White House has come from the left, some right-of-center organizations recently urgedWright on April 14 to “preserve” the LPO for the sake of “American dominance.” The organizations argue that the LPO plays a “critical role” in enabling “new nuclear power development.”

“LPO continues to play a critical role in financing infrastructure that enables new nuclear power development, revitalizes domestic mineral production, and modernizes both grid and gas systems — all central to the administration’s goals of lowering energy costs, reshoring manufacturing, and achieving energy dominance,” the letter reads.

Subsidizing energy projects that are not able to survive on their own in the free market is questionable, Amy Cooke, the co-founder and president of Always on Energy Research and the director of the Energy and Environmental Policy Center, told the DCNF. “The calls to eliminate it are well-founded, and at the very least, it should be dramatically reformed,” she said. “If the market isn’t interested in it, is it the responsibility of the Department of Energy to fund [these projects]?” she asked.

“We should be funding improvements for firming the grid and not arbitrarily add more intermittency,” Béliveau said in reference to wind and solar projects that provide less inertia — the grid’s ability to continue running smoothly after a disturbance occurs between energy supply and demand for the electrical grid.

“If it’s going to exist, then reforms need to make sure that we’re being good stewards of taxpayer dollars,” he added, pointing to natural gas and nuclear as options that could help “firm the grid.”

“The Trump administration’s version of energy dominance has created a source-neutral way of picking winners and losers,” he continued, noting that reliability, affordability and security are the priorities of the administration, as opposed to a climate-change centric approach to energy policy.

Trump declared a national energy emergency on his first day back in office and signed an executive order to boost domestic energy generation. He signed a series of other EOs within his first 100 days in office to speed up the permitting process and clear red tape for several industries including coal and critical mineral mining.