In Geopolitics Today - Monday, October 4th
OPEC+ Meeting Promises No Deviation from Agreed Plan and Russia First to Test Submarine-launched Hypersonic Missile
OPEC+ Meeting Promises No Deviation from Agreed Plan
In July this year, the OPEC+ group of nations — Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan, — all agreed to ramp up oil production by 400,000 barrels per day (bpd) every month from August onwards. Today, following another meeting of the OPEC+ group, it was announced that the terms of the prior agreement will be adhered to, and the next month will therefore see no change to the plans of increasingly production by 400,000 bpd.
For years the surge in US shale production has afforded Washington a dominant hand in oil markets, but the latest Dallas Fed Survey found that costs in the industry have continued rising sharply for the second quarter. The report also highlighted a slowdown in growth in the oil and gas sector in the US. With the costs associated with shale production rising in the United States, OPEC+ is in a strong position to influence oil markets.
This means that OPEC+, altogether holding 55 percent of the global oil supplies and 90 percent of proven global oil reserves, is afforded a level of influence over the critical resource rarely seen before. OPEC+ members plan to stick to the deal until 2022. Crude oil prices have risen to about $80 per barrel, with the price expected to rise further as demand for oil increases as economies the world over are opening up and lifting strict COVID-19 restrictions. This spells good news for all OPEC+ members, but especially Russia and Saudi Arabia, both of which are major contributors alongside the United States to global oil production.
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Russia Tests Submarine-launched Hypersonic Missiles
Over the last two days, the Ministry of Defence of the Russian Federation announced that the Russian Navy has successfully completed two submarine-launched flight tests of its Циркон or “Tsirkon” missile. If confirmed, the successful launches would mark a first as the Tsirkon hypersonic missile had previously only been fired by surface warships.
The successful launch of these advanced missiles implies that Moscow is well-positioned in the hypersonic race, and is the first country to conduct a successful flight test of such weapons from a nuclear-powered submarine. In the first test, the missile was fired from a surfaced submarine, while in the second, the Severodvinsk successfully launched a Tsirkon missile from a submerged position. Russian hypersonic weapons testing will now likely look toward conducting salvo firing tests of the missile.
The development of hypersonic weapons and the deployment of systems like Avangard and Tsirkon are part and parcel of Russia’s military modernisation drive. While many still doubt just how capable Russia’s new generation of weapons are, many are starting to recognise the threat that the speed, manoeuvrability, and altitude of hypersonic missiles pose. What few deny is that hypersonic technology will be disruptive, and that the development and deployment of hypersonic weapons will upend strategic stability.
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