White House Furious After OPEC Announces Supply Cut
(TheRedWire.com) – Over the last eighteen months, gas prices in the US have risen at one of the fastest rates in history. In June, a gallon of gas cost consumers over $5 a gallon on average across the country, an all-time high. Before the most recent punch to people’s wallets, the last time gas hit a record price was $4.114 in July 2008. As America prepares for the midterm elections, voters could be in a sour mood, thanks to The Organization of the Petroleum Exporting Countries (OPEC+) and their non-OPEC allies.
On Wednesday, October 5, OPEC+ announced its intention to cut 2 million barrels of oil daily. The oil cartel designed the move to help oil prices recover after they fell from $120 per barrel last summer to around $80 earlier in the week. While the White House anticipated the move, US officials were furious after the announcement.
Production Cuts Disappoints Biden
President Joe Biden visited Saudi Arabia in July to influence the Kingdom to maintain or increase oil production. Instead, in what some perceive as a slight, the oil giant agreed to increase supplies negligibly and not at the levels the administration wanted.
Shortly after the OPEC+ announcement about the reduction, the White House came out swinging. National Security Advisor Jake Sullivan and National Economic Council (NEC) Director Brian Deese released a statement condemning the move. They called it “short-sighted” and argued maintaining the current oil supply was of “paramount importance.” They added the production squeeze came as the global economy struggled with the consequences of Putin’s war on Ukraine.
Sullivan and Deese noted gas prices had come down since the summer’s highs. Still, in recent weeks, it started to trend upward. To counter the cartel’s move, they said the government would release 10 million barrels of oil from the Strategic Petroleum Reserve (SPR) within the next month. In March, Biden initially authorized a release of 1 million barrels per day of oil from the SPR through September. It has shrunk to the lowest levels since 1985.
Additionally, the two government leaders said the president called on US energy companies to keep costs from rising on consumers by closing the gap between wholesale and retail prices. They also noted the administration would work with Congress to find alternative ways to reduce the OPEC+ cartel’s influence over energy supplies.
Could Congress Get Involved?
According to a report by CNBC, energy analysts say Congress could pass the No Oil Producing and Exporting Cartels (NOPEC) bill. The administration previously opposed it but may no longer stand in Congress’s way if the House and Senate take a floor vote. The legislation would formally name OPEC as a cartel, subjecting its members to anti-trust laws designed to protect consumers from artificial spikes in the price of oil.
What other measures could Biden pursue?
For now, the administration isn’t saying, but there could be more announcements soon. Will the president unleash the US energy industry to increase supplies to reduce costs to the consumer?
Stay tuned.
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