The OPEC+ group of oil-producing nations agreed Wednesday to slash oil production by 2 million barrels per day as it seeks to stabilize global oil prices after months of decline, delivering a major blow to the Biden administration ahead of the midterm elections.
Members of the group, which includes Saudi Arabia and Russia, are hoping to spur recovery and prevent volatility after oil prices dropped to around $90, down from $120 three months earlier.
The decision was announced by OPEC+ members in a press release Wednesday, and comes despite intense pressure from the United States, which has lobbied Saudi Arabia not to cut production.
The production cuts are the largest since the COVID-19 pandemic and threaten to drive a major wedge between OPEC+ members and President Joe Biden at a politically perilous time for his party in Congress.
In July, Biden made his first presidential visit to Saudi Arabia, which he described on the campaign trail as a “pariah” for ordering the 2018 murder of U.S.-based journalist Jamal Khashoggi at its embassy in Istanbul. On that trip, he urged the kingdom to increase production and help drive down gas prices.
Oil prices jumped this week in anticipation of the news. Futures for international benchmark Brent crude rose as high as $92.00 per barrel early Wednesday, while futures for U.S.-based West Texas Intermediate increased to $86.66.
It remains unclear what impact the OPEC+ production cuts will have on gas prices in the U.S. or how quickly those would be reflected in the markets.
The White House said in a statement that Biden is “disappointed” by the OPEC+ cuts, which it described as a “shortsighted decision” that will “disproportionately hurt lower- and middle-income countries.”
Officials also said Biden might release additional oil from the U.S. Strategic Petroleum Reserve (SPR) if necessary—adding to the 180 million already ordered in March.
Biden “will continue to direct SPR releases as appropriate to protect American consumers and promote energy security, and he is directing the Secretary of Energy to explore any additional responsible actions to continue increasing domestic production in the immediate term,” the statement said.
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But any additional release from the stockpile would be a departure from the White House’s position just one day earlier.
Asked at a press briefing Tuesday whether Biden would release more oil from the stockpile, White House press secretary Karine Jean-Pierre said the administration is not considering doing so.
“We’re not going to be considering any more releases” from SPR, she said.
