The OPEC+ group's decision to reduce its crude oil production target by 2 million barrels per day (bpd) came at "the worst possible moment" and will have a wide-ranging impact on the economy and inflation, Barbara Leaf, Assistant Secretary of State for Near Eastern Affairs, said on Wednesday.
The OPEC+ move to reduce oil output comes just as the world was recovering from the COVID slump of 2020 and has to face the economic challenges of the Russian invasion of Ukraine, Leaf said during a visit to Kuwait, as quoted by Bloomberg.
The United States said last week there would be some consequences for Saudi Arabia for its decision together with Russia to steer OPEC+ into a large oil production cut after OPEC+ endorsed earlier this month a decision to reduce the headline production target by 2 million bpd as of November.
Multiple OPEC+ producers defended the group's decision to reduce production in a wave of statements on Sunday and Monday, in what looked like a coordinated response to U.S. criticism of the cut.
A day after U.S. President Joe Biden threatened "there will be consequences" for OPEC+'s decision, Saudi Arabia came out with a statement that expressed "its total rejection" of Biden's and other statements from Washington with regard to the decision.
The UAE's Energy Minister Suhail al-Mazrouei wrote on Twitter on Sunday, "I would like to clarify that the latest OPEC+ decision, which was unanimously approved was a pure technical decision, with NO political intentions whatsoever."
"There's no question that there have been statements both from Riyadh and Washington telling us that all is not well," Dana Stroul, Deputy Assistant Secretary of Defense for the Middle East, said at the same press briefing in Kuwait on Wednesday. "We're going to have to recommit to dialog to discuss a way forward," Stroul added.
By Tsvetana Paraskova for Oilprice.com
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Comments
This release from the SPR and all the "meddling" in global oil prices by the Biden Administration is all about desperately trying to influence the mid-term US elections...
On the other hand, OPEC+’s cut is aimed at ensuring stability of both the global oil market and prices and also defending the interests of its members by ensuring a Brent crude price at $100 a barrel or slightly higher to enable them to balance their budgets and also maintain a decent standard of livelihood for their peoples.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert