Biden criticizes OPEC+ agreement to significantly reduce oil production

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Last Updated on October 6, 2022 by Bitfinsider

On Wednesday (Oct. 5), OPEC+ agreed to significant cutbacks in oil output, reducing supplies in an already constrained market and sparking one of its largest conflicts with the West as the US administration criticized the unexpected move as shortsighted.

Saudi Arabia, the de-facto leader of OPEC, stated that the output reduction of 2 million barrels per day (bpd), or 2% of the world’s supply, was required in response to rising interest rates in the West and a weakened global economy.

The kingdom rejected claims that it was working with OPEC+ member Russia to raise prices and asserted that Western criticism of the organization was frequently motivated by “wealth arrogance.”

President Joe Biden would continue to consider whether to release additional strategic oil supplies to cut costs, according to the White House.

Due to the high inflation, Biden’s support ratings are poor ahead of the midterm elections, and he has asked Saudi Arabia, a longtime ally of the US, to assist bring down prices.

According to US sources, Washington wants lower oil prices in part to deny Moscow oil money. This year, Biden visited Riyadh but was unable to obtain any specific commitments to cooperation on energy. The fact that Saudi Arabia has not denounced Moscow’s actions in Ukraine has further damaged relations.

As a result of concerns about a worldwide economic slowdown, rising US interest rates, and a stronger dollar, oil prices have fallen to approximately US$90 from US$120 three months ago. A recovery in oil prices could be sparked by the decrease in oil supplies decided in Vienna on Wednesday.

Abdulaziz bin Salman, the Saudi energy minister, claimed that OPEC+ had to act quickly as central banks around the globe proceeded to “belatedly” combat growing inflation with higher interest rates.

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