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US President 'disappointed' by OPEC+ decision to cut oil production: Officials

The cuts come into effect in November 2022 and go against US calls to increase production to reduce prices ahead of midterm elections

October 5, 2022 at 6:52 pm

US President, Joe Biden, “is disappointed” by an OPEC+ decision to cut oil production which he said would have negative effects on lower and middle-income nations, officials said Wednesday, Reuters reports.

“The President is disappointed by the short-sighted decision by OPEC+ to cut production quotas, while the global economy is dealing with the continued negative impact of Putin’s invasion of Ukraine,” according to a statement by National Security adviser, Jake Sullivan, and top economic adviser, Brian Deese.

The decision will have the most negative effect on lower- and middle-income countries that are reeling from elevated energy prices, it said.

“The President’s work here at home, and with allies around the world, has helped to bring down US gas prices: since the beginning of the summer, gas prices are down $1.20 – and the most common price at gas stations today is $3.29/gallon.

“At the President’s direction, the Department of Energy will deliver another 10 million barrels from the Strategic Petroleum Reserve to the market next month, continuing the historic releases the President ordered in March,” said the statement.

Biden will continue to direct releases as appropriate to protect American consumers and promote energy security.

The President also urged American energy companies to keep bringing down prices at the pump by closing the historically large gap between wholesale and retail gas prices.

“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,” said the statement.

“Finally, today’s announcement is a reminder of why it is so critical that the United States reduce its reliance on foreign sources of fossil fuels. With the passage of the Inflation Reduction Act, the US is now poised to make the most significant investment ever in accelerating the clean energy transition while increasing energy security, by increasing our reliance on American-made and American-produced clean energy and energy technologies,” it added.

The Organisation of Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, agreed Wednesday to cut production by 2 million barrels per day from the August 2022 required production levels, starting in November.

Read: Oil prices up over supply cut fears ahead of OPEC+ meeting