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 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.