The US has accused Opec+ of damaging the global economy after the cartel of oil-producing nations announced the biggest cut to production since the start of the pandemic.
The decision to slash supply by two million barrels a day is an “aggressive attempt to raise oil prices” that puts “further inflationary pressures” on the already troubled energy sector, according to the Financial Times. The move has also “put the cartel on a collision course with Washington”, the paper added.
The White House claimed that as well as causing economic turmoil, Opec+ was deliberately siding with Russia, which relies on pricey gas exports to fund its war in Ukraine. The cartel – whose members include Russia and Saudi Arabia – has denied the accusation, but “the decision undermines Biden’s strategy of putting economic pressure” on the Kremlin, said The Guardian.
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Manoj Nair, business editor at Gulf News, argued that Biden also had an eye on November’s midterm elections, amid fears of “high gasoline prices drawing the ire of voters”. In a bid to offset the Opec+ cuts, the president has ordered the US Strategic Petroleum Reserve to put a further 10m barrels on the market.
But any energy price rises could prompt a tide of “economic pessimism”, the FT warned.
According to Gulf News's Nair, Opec+ hope the cut will help per-barrel prices “push their way back to $100 or thereabouts”.
Following the announcement, the price of Brent crude “rose but in a much more limited way than many would’ve predicted”, wrote Irina Slav on Oilprice.com. The price increased by just 2% to $93.80 on Wednesday, with the gains limited “by a lack of clarity about exactly how much oil will be removed from markets”, Slav argued.
