Oil prices jump after OPEC+ announces surprise production cuts

Oil prices surged after key oil producing countries announced a round of surprise production cuts Sunday totaling some 1.16 million barrels per day, a move that spurred criticism from the White House.

Reuters reported that oil prices jumped about $5 per barrel as trading opened in Asia Monday morning, with Brent Futures crude prices jumping about 6.3 percent to $84.95 a barrel, its highest price in about a month.

West Texas Intermediate crude also jumped as much as 8 percent in early trading, hitting about $80 a barrel, in its biggest singe-day jump in a year, according to Bloomberg.

Saudi Arabia, along with Russia and other OPEC+ countries, announced the production cut, which will start next month, on Sunday, in a move aimed at increasing global oil prices.

It comes on top of a previous commitment by the producers to cut production by 2 million barrels a day through the end of the year. Saudi Arabia alone announced that it would start a 500,000 barrel-a-day reduction.

A spokesperson for the White House’s National Security Council panned the cuts on Sunday.

“We don’t think cuts are advisable at this moment given market uncertainty — and we’ve made that clear,” the spokesperson said, adding the administration remains focused on bringing down oil prices in the U.S. from their peak last year, where gas prices hit a high of $5 a gallon.

Average gas prices across the country were just above $3.50 per gallon, according to AAA.

Republicans hammered President Biden as gas prices were soaring last year, and the White House has touted falling prices in recent months as evidence of his success in fighting inflation.

Previous cuts by OPEC+ have inflamed those tensions, and prompted calls for Biden to reconsider his strategy toward Saudi Arabia, which has been a driving force behind the production cuts.