The administration of US President Joe Biden launched a large-scale campaign in a last attempt to distract US allies in the Middle East from the decision to significantly reduce oil production, the Cable News Network (CNN) reported.
But these endeavors seem to have failed, as the decision of ” OPEC+” came after its decisive meeting, on Wednesday, with an expected announcement of a significant production cut, in a decision compatible with the attempts of the producing countries to raise oil prices.
This decision, in turn, is likely to lead to a rise in gasoline prices in the United States at an alarming stage for the Biden administration, which comes only five weeks before the midterm elections for Congress.
Biden worried about slash in oil production
Over the past several days, the Biden administration’s top energy, economic and foreign policy officials have been enlisted to pressure their foreign counterparts in Middle Eastern allies including Kuwait, Saudi Arabia and the United Arab Emirates to vote against cutting oil production.
According to a draft the White House sent to the Treasury Department on Monday, the prospect of cutting oil production was described as a “complete disaster”, warning that it could be seen as a “hostile act.”
President Joe Biden expressed disappointment with the decision, which his National Security Adviser Jake Sullivan and White House Chief Economic Adviser Brian Dees, in a joint statement, called short-sighted.
The statement quoted Sullivan that Biden will direct the release of oil from the strategic reserve as needed, and that the administration will consult with Congress on additional tools and mechanisms to reduce OPEC+ control of energy prices.
In turn, US Secretary of State Anthony Blinken said, on Wednesday, that the United States is working to ensure that energy supplies continue in the market and that prices remain low, after the OPEC + decision to reduce oil production.
This talk carries a new hint of the “No to Oil Production and Export Cartels” (NOPEC) law, which the US Senate moved, in May; With the aim of subjecting the OPEC+ countries to accountability, and possibly to sanctions, under antitrust laws.
Counter steps
After the decision, Reuters quoted Citibank analysts as saying that it may anger the Biden administration before the US midterm elections, and may invite a “political reaction,” referring to NOPEC.
But the communications coordinator in the US National Security Council, John Kirby, said in statements to Fox News that the decision does not mean that Biden’s visit to Saudi Arabia was a waste of time; Because the coalition has not approved significant cuts since the visit, mid-July 2022.
Biden’s visit “also included talks with Saudi Crown Prince Mohammed bin Salman, on matters not related to oil,” according to Kirby, who confirmed that it also dealt with “strategic national goals.”
However, Kirby also said that his country should reduce its dependence on foreign oil from OPEC + or others.
Repercussions of the decision
The OPEC Plus alliance – which includes members of the Organization of the Petroleum Exporting Countries and their partners, including Russia – has ignored the White House’s pleas to continue pumping oil supplies, and decided to cut production by two million barrels per day, the largest reduction since the outbreak of COVID-19 in 2020.
This move may lead to a rise in crude oil prices, which analysts fear will increase inflation rates, which reached record levels for decades in many countries.
Agence France-Presse (AFP) said the move could give Russia support before the European Union (EU) bans most of its oil exports later this year and the Group of Seven attempts to rein in oil prices.
Crude oil prices rose in global markets after the announcement of the OPEC+ decision, exceeding the benchmark Brent crude price of $93 a barrel.
The West accuses Russia of using energy as a weapon, and of creating a crisis in Europe that may force it to set quotas for gas and electricity consumption this winter.
In return, Moscow accuses the West of using the dollar and financial systems such as swift as a weapon against it.
One of the reasons why Washington is interested in lowering oil prices is its attempt to deprive Moscow of the proceeds from the sale of crude.
OPEC + decides to cut production by 2 million barrels
OPEC+ alliance announced on Wednesday, that it will reduce production by 2 million barrels of oil per day, despite the great pressure exerted by the United States to prevent the decision from being issued.
According to the coalition statement after its meeting in Vienna, the implementation of the reduction in oil production will start from next November, and the next meeting of the coalition will be in December.
OPEC wants to regain control of global oil production, control that it has largely lost in recent years. Wednesday’s decision is exactly one chapter in this opera, as it helps the Saudis and their allies consolidate their influence and power in the oil markets.
