Biden ‘disappointed’ by OPEC+ decision to cut oil production

The White House on Wednesday admonished what it called a “shortsighted decision” by OPEC and its allies to cut oil production by 2 million barrels per day, a move that could lead to a rise in gas prices domestically.

National security adviser Jake Sullivan and top economic adviser Brian Deese issued a statement that took issue with the decision, citing ongoing concerns about the impact of the Russian invasion of Ukraine.

“At a time when maintaining a global supply of energy is of paramount importance, this decision will have the most negative impact on lower- and middle-income countries that are already reeling from elevated energy prices,” Sullivan and Deese said in a joint statement, adding that President Biden was “disappointed” by the decision.

The Department of Energy will release 10 million barrels from the Strategic Petroleum Reserve next month, the White House said, and Biden will direct releases of oil from the Strategic Petroleum Reserve “as appropriate to protect American consumers and promote energy security.”

“The President is also calling on U.S. energy companies to keep bringing pump prices down by closing the historically large gap between wholesale and retail gas prices — so that American consumers are paying less at the pump,” Sullivan and Deese said.

The White House also used the announcement to highlight the importance of transitioning away from a reliance on fossil fuels, which has been a key part of the Biden administration’s agenda.

The announced cut from OPEC+, which includes the 13 OPEC nations and 11 non-members including Russia, is roughly equivalent to 2 percent of global supplies.

The move flies in the face of a push by Biden and the White House to get the coalition to avoid a production cut. Biden in July visited Saudi Arabia to directly appeal to its leaders to increase oil production, despite his administration’s frequent criticism of the kingdom’s human rights record. After the meeting, Saudi Arabia announced a production increase, but a significantly smaller one than the U.S. had requested.

It’s unclear what immediate effect the production cut will have on gas prices, but any spike in costs so close to the midterms could be problematic for Biden and Democrats. The president and his team had in recent weeks touted a steady decline in gas prices from summer highs of more than $5 per gallon, but prices have started to tick up again in recent weeks, according to AAA.