OPEC+ was short-sighted to slash oil production amid the war in Ukraine and its decision will hurt low- and middle-income countries the most, White House press secretary Karine Jean-Pierre said Wednesday.
The group of oil-producing nations has agreed 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.
WHITE HOUSE EXPRESSES ‘DISAPPOINTMENT’ WITH OPEC+ SLASHING OIL PRODUCTION
“We think that decision by OPEC+ is one of purported self-interest, it’s a mistake, and it’s misguided,” Jean-Pierre told reporters aboard Air Force One. “We are always in touch with partners, both producers and consumers. It’s no secret the president believes energy supply should meet energy demand. It’s important for the global economy as it faces global challenges.”
Biden was heading to Florida to tour damage from Hurricane Ian alongside Gov. Ron DeSantis, but reporters peppered Jean-Pierre with questions about OPEC and gas prices during the flight.
Members of the oil production group, which includes Saudi Arabia and Russia, are hoping to spur recovery and prevent volatility after prices dropped to about $90, down from $120 three months earlier. The decision 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.
Jean-Pierre emphasized the impact the decision will have on poorer populations.
“If there is a meaningful price impact of OPEC’s decision, it will particularly be on low- and middle-income countries,” she said. “The president’s efforts have made progress bringing down U.S. gas prices. Since the beginning of the summer, gas prices are down nearly $1.20.”
That progress is threatened with production now set to be slashed.
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 per barrel early Wednesday, while futures for U.S.-based West Texas Intermediate increased to $86.66.
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Biden will release another 10 million barrels from the Strategic Petroleum Reserve in response to the move, Jean-Pierre said, and called on oil companies to lower their margins.
“The president is once again calling on U.S. energy companies to keep bringing pump prices down by closing the historically large gap between wholesale and retail gas prices,” she said. “In light of today’s action, the president’s administration will also consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices.”
