Biden Admin’s Efforts Snubbed as OPEC Approves Massive Cut to Production
(UnitedVoice.com) – Gas prices soared earlier this year as the world got back to normal after the pandemic. The OPEC+ cartel kept production low, allowing oil to sell for well over $100 per barrel two years after the price dropped below $0. President Joe Biden repeatedly asked the oil-producing nations to increase the supply, but the group shot him down for months.
Finally, OPEC+ began expanding the supply. At the same time, Biden started releasing oil from the Strategic Petroleum Reserve (SPR), and gas prices started going down. That could change after a decision by the oil-producing nations.
OPEC+ Slashes Production
On Wednesday, October 5, OPEC+ announced it approved an oil production cut of 2 million barrels per day. NPR reported the group said it based the decision on “uncertainty that surrounds the global economic and oil market outlook.”
President Joe Biden traveled to Saudi Arabia over the summer to appeal to the nation to support the US desire to see an increase in production. Reports indicate the Middle Eastern power advocated cutting production to prop up the prices because they’ve dropped in recent weeks. Some see the vote as a rebuke of America’s president.
Reportedly, Saudi Arabia is also worried about oil releases from international stockpiles, including from the US. ClearView Energy Partners Managing Director Jacques Rousseau said the production cut was definitely “not the outcome that Biden wanted” from his diplomatic mission to Saudi Arabia this summer.
Biden announced he would be releasing 10 million more barrels of oil shortly after news broke about the oil cartel’s production cut. The latest release will come in November in the hope of counteracting the move by the international body.
It’s unclear how much the oil production cuts will impact the market and prices, but losing 2 million barrels per day is significant. The president is currently releasing 1 million barrels daily from the SPR but scheduled the order to end on October 31.
NEC Director Brian Deese and National Security Advisor Jake Sullivan released a statement condemning OPEC+ for its decision while the world is “dealing with the continued negative impact of Putin’s invasion of Ukraine.” They added that “lower- and middle-income countries” would feel the worst impacts because they “are already reeling from elevated energy prices.”
The OPEC+ decision comes as the US moves closer to November and the midterm elections. The president is reportedly doing his best to prevent it from impacting his party. It’s unclear whether he will be able to keep gas prices down.
What do you think about the decision made by the OPEC+ cartel?
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