Decision of OPEC, its allies on oil production a mistake: US
Washington, October 19
The move of the OPEC and its allies to cut oil production is a “mistake” and a “short-sighted” decision that has favoured the Russians and the US is going to re-evaluate its ties with Saudi Arabia, the White House has said.
Members of the Organisation of the Petroleum Exporting Countries (OPEC) and their Russia-led allies earlier this month agreed on a major cut in oil production, amidst a downward trend in prices. The 13-nation OPEC cartel and its 10 Russian-led allies agreed to reduce two million barrels per day from November at a meeting in Vienna. It is the biggest cut since the height of the Covid-19 pandemic in 2020.
2 mn barrels cut per day
- On October 5, the OPEC+ alliance announced a cut in oil production at a meeting
- in Vienna
- 13-nation OPEC cartel and its 10 Russian-led allies agreed to reduce two million barrels per day from November
- Supply cut will also exacerbate tensions between Saudi Arabia and the US
- President Joe Biden to re-evaluate his relationship with Saudi Arabia, a leading oil producer of the world
- Comes at a time when much of the world is already battling soaring energy costs
Global market uncertain: opec
- The OPEC+ group has justified the decision due to “uncertainty” that surrounds the global economy and oil market outlook
- The world consumes up to 100 mn barrels of oil a day, so taking 2 mn off the market would have a noticeable effect, a report stated
“The decisions that OPEC+ made last week, we believe, sided with the Russians and were against the interests of the American people and the families around the world,” White House Press Secretary Karine Jean-Pierre said. President Joe Biden is going to re-evaluate his relationship with Saudi Arabia, a leading oil producer, she added.
On October 5, the OPEC+ alliance announced a cut in oil production — an amount that could drive oil and gas prices back up after weeks of a downward trend. The meeting of the 24 OPEC+ oil-producing countries, including Russia, comes at a time when much of the world is already battling soaring energy costs. A supply cut will also exacerbate tensions between Saudi Arabia and the US, the National Public Radio (NPR) reported. OPEC+, formed in 2016, includes the 13 Organisation of Petroleum Exporting Countries members and 11 other non-OPEC members.
A dramatic cut in oil production could also help Russia, which is co-chair of OPEC+. Its economy is based on energy revenues, now critical to its war effort in Ukraine. Despite sanctions, Russia hasn’t experienced a huge decline in the production, the report said.
