The White House has accused Opec+ of aligning with Russia after Saudi Arabia led the group in agreeing deep oil production cuts, prompting a backlash from countries already battling surging energy inflation triggered by Moscow’s invasion of Ukraine.
The Opec+ group said it would reduce production targets by 2mn barrels a day, equivalent to 2 per cent of global supply, following its first in-person meeting in two years in Vienna. The actual cut in output is likely to be closer to Imn b/d as many weaker members have struggled to hit production targets in recent months.
The decision to cut came despite extensive lobbying by the US government before the meeting and marks a significant breach with the Biden administration, which is seeking to drive down oil and petrol prices ahead of crucial midterm elections in November and to starve Russia of energy revenues.
The Biden administration criticized the move on cuts, saying it was a “shortsighted decision” at a time when “maintaining a global supply of energy is of paramount importance”. White House spokesperson Karine Jean-Pierre told reporters on Air Force One it was “clear” Opec+ was “aligning with Russia”.
Saudi Arabia’s energy minister Prince Abdulaziz bin Salman dismissed suggestions that the cartel’s cuts would hurt oil consumers, arguing instead that the group’s actions were intended to encourage long-term investment in oil production.
“Show me where is the act of belligerence,” he said in response to questions following the announcement. Energy markets required “guidance without which investment would not happen”.
In response to the Opec+ decision, the US said it would continue to release oil from its strategic stockpiles “as appropriate” and was exploring “additional responsible actions” to lift the domestic oil supply.
Biden will also work with Congress on legislation to “reduce Opec’s control over energy prices”, its statement added, in an apparent reference to anti-cartel legislation EC that has long been considered by US lawmakers