Guwahati: The Organization of the Petroleum Exporting Countries (OPEC) and its allies announced a reduction in oil production quotas on Wednesday (local time), and the White House voiced dismay over the news.
The Biden administration criticised the OPEC+ plan to cut back, calling it a “shortsighted decision.” On Air Force One, White House press secretary Karine Jean-Pierre stated that it was “obvious” that OPEC+ was “aligning with Russia.”
“The president is disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin’s invasion of Ukraine,” the White House said in a statement from national security adviser Jake Sullivan and National Economic Council Director Brian Deese.
Members of OPEC+ announced earlier in the day that they will reduce their daily output quotas for November by two million barrels due to the “uncertainty that surrounds the global economic and oil market outlooks.”
“We (OPEC+) are here to stay as a moderating force, to bring about stability,” Saudi Arabian energy minister Abdulaziz bin Salman Al Saud said during a news conference.
According to an OPEC+ document outlining cuts, Saudi Arabia and Russia would each decrease their output by 526,000 monthly barrels, which is the largest individual drop of the 19 participating countries.
Shortly after the release of an OPEC+ press release detailing the output cuts, the White House said, “In light of today’s action, the Biden Administration will also consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices.”
The White House expressed concern that lower- and middle-income nations, who are already suffering from high oil prices, would be most affected by OPEC’s decision.
The White House also announced that President Biden has instructed the Department of Energy to release an additional 10 million oil barrels from the nation’s Strategic Petroleum Reserve next month, underscoring the administration’s commitment to preserving low gas prices with one month left until the crucial midterm elections.
On October 5 in Vienna, Austria there was the 33rd OPEC and non-OPEC ministerial meeting as well as the 45th Joint Ministerial Monitoring Committee (JMMC) meeting.
Under the strain of a strengthening dollar, which makes crude oil priced in greenbacks more costly for buyers using foreign currencies, and rising interest rates, which could lead to a recession and lower oil demand, oil prices fell to their lowest levels during the most recent trading session.
Brent fell 7.1% in the previous two trading days, while US West Texas Intermediate (WTI) oil fell 8.1%. Officials from significant producers responded to the recent drops by saying they might take action to maintain price stability.