The White House on Wednesday sharply criticized the Organization of the Petroleum Exporting Countries, or OPEC, after its members decided to implement a significant cut to oil production.
The group of significant oil producers, which includes Saudi Arabia and Russia, announced it would slash oil production by 2 million barrels per day. For months, the Biden administration attempted to lobby the Saudi kingdom to produce more oil, with President Joe Biden even visiting Saudi Arabia in July.
“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 [Russian President Vladimir] Putin’s invasion of Ukraine,” National Security Advisor Jake Sullivan and National Economic Council Director Brian Deese said in a statement on Wednesday morning after OPEC’s announcement.
Their statement touted the White House’s recent actions to help “bring down U.S. gas prices” and confirmed that the “Department of Energy will deliver another 10 million barrels from the Strategic Petroleum Reserve” to continue the “historic releases” that Biden ordered in March.
“The President will continue to direct SPR releases as appropriate to protect American consumers and promote energy security, and he is directing the Secretary of Energy to explore any additional responsible actions to continue increasing domestic production in the immediate term,” according to the statement.
Gas Prices
Gas prices surged to $5 on average nationwide in June. Since then, prices have steadily dropped as the Biden administration released oil from the U.S. Strategic Petroleum Reserve, according to the American Automotive Association (AAA).
For the past several weeks, however, the average price for regular gas has again increased on a daily basis. It now stands at $3.83 per gallon as of Wednesday, AAA data shows, representing an uptick of about 7 cents from a week ago.
White House press secretary Karine Jean-Pierre also reporters Wednesday on Air Force One that the OPEC decision was a “mistake” and accused the group of “aligning with Russia,” although Russia is a key member of OPEC.
During a news conference Wednesday at the OPEC+ meeting in Vienna, a reporter asked an unidentified Saudi minister whether OPEC is trying “to hold the world hostage” with the latest oil production reduction. The minister said such a statement was “very provocative” and asked the reporter to “show me where is the act of belligerence.”
Speaking to reporters Wednesday, United Arab Emirates Energy Minister Subail al-Mazroui said that OPEC’s decision would be based on technical considerations.
“The decision is technical, not political. We will not use it [OPEC] as a political organization,” he said.
Political Fallout
Cutting oil production just weeks before November’s midterm elections poses a possible political problem for Biden and his fellow Democrats, as the president has often claimed that he was working to decrease gas prices.
Since he took office in January 2021, Republicans and oil industry officials have lambasted his administration for ending construction of the Keystone XL pipeline, suspending drilling leases, and favoring electric vehicles.
Officials in his administration have also been accused of being out of touch with ordinary Americans’ concerns while touting electric cars in the face of record-high gas prices earlier this year.
Outside of Washington, some motorists have targeted Biden by placing pictures showing him pointing next to the text, “I did that!” on gas pumps.
In a note issued this week, financial analysts at Citi warned, “Higher oil prices, if driven by sizeable production cuts, would likely irritate the Biden Administration ahead of U.S. mid-term elections.”
“There could be further political reactions from the U.S., including additional releases of strategic stocks, along with some wildcards including further fostering of a NOPEC bill,” Citi said, referring to a U.S. antitrust bill targeting OPEC, Reuters reported.
But the impact might be limited because some OPEC producers weren’t able to meet previous production targets.
“An announced cut of any volume is unlikely to be fully implemented by all countries, as the group already lags 3 million barrels per day behind its stated production ceiling,” Rystad Energy analyst Jorge Leon said in a note, according to CNN.
From The Epoch Times
