The move of the OPEC and its allies to cut oil production is a “mistake” and a “short-sighted” decision that has favoured the Russians and the U.S. is going to re-evaluate its ties with Saudi Arabia, the White House has said.
Members of the Organisation of the Petroleum Exporting Countries (OPEC) and their Russia-led allies earlier this month agreed on a major cut in oil production, amidst a downward trend in prices.
The 13-nation OPEC cartel and its 10 Russian-led allies agreed to reduce two million barrels per day from November at a meeting in Vienna. It is the biggest cut since the height of the COVID-19 pandemic in 2020.
“The decisions that OPEC+ made last week, we believe, sided with the Russians and were against the interests of the American people and the families around the world,” White House Press Secretary Karine Jean-Pierre told reporters at her daily news conference on Tuesday.
“We believe that the decision is going to hurt and harm lower-income economies. It was misguided and it was a mistake and a short-sighted decision,” she said in response to a question.
The White House Press Secretary said President Joe Biden is going to re-evaluate his relationship with Saudi Arabia, a leading oil producer.
“This is something that he has talked about since the beginning of this administration. He wants to do it in a bipartisan way, which is the way it has been done for the last eight decades when we talk about our relationship with Saudi Arabia,” she said.
“So, he is going to do this in a methodical way, in a strategic way, and he is going to certainly get inputs from members of both parties,” the Press Secretary said, adding that more information on this would be shared later.
On October 5, the OPEC+ alliance announced a cut in oil production — an amount that could drive oil and gas prices back up after weeks of a downward trend.
The meeting of the 24 OPEC+ oil-producing countries, including Russia, comes at a time when much of the world is already battling soaring energy costs. A supply cut will also exacerbate tensions between Saudi Arabia and the U.S., the National Public Radio (NPR) reported.
OPEC+, formed in 2016, includes the 13 Organisation of Petroleum Exporting Countries members and 11 other non-OPEC members.
In a statement, the group justified the decision due to “uncertainty that surrounds the global economy and oil market outlook.”
The world consumes up to 100 million barrels of oil a day, so taking 2 million off the market would have a noticeable effect, the report added.
A dramatic cut in oil production could also help Russia, which is co-chair of OPEC+. Its economy is based on energy revenues, now critical to its war effort in Ukraine. Despite sanctions, Russia hasn’t experienced a huge decline in production, the report said.
Published - October 19, 2022 03:36 pm IST
