Joe Biden's administration enraged over cut in Opec+ oil output. Details here

Senior officials saw the move as a slap in the face of the US and an indication that the oil producers' group is siding with Russia.

Agencies
US President Joe Biden's administration and allies were outraged by the Organisation of the Petroleum Exporting Countries (Opec+)'s decision to limit oil output, with senior officials viewed the move as a slap in the face of the American president's efforts to restore ties with Saudi Arabia.

The White House stated that it saw the decision by the oil production cartel, in which the plus sign represents Russia's inclusion, as a geopolitical move and a slight to Biden, who is seeking to reduce Russian revenues and keep gasoline prices low ahead of the November congressional elections.

He enraged his fans by visiting Jeddah in July and welcoming Crown Prince Mohammed bin Salman with a fist bump, despite US intelligence assessments that the kingdom's de facto ruler was behind the 2018 murder of Saudi dissident and Washington Post journalist Jamal Khashoggi.


According to a White House spokesman, the announcement clearly shows that Opec+ is aligning with Russia.

OPEC+ meet: What's on agenda & how it will impact crude oil prices
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​Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, will cut output by more than 1 million barrels per day (bpd) at their first in-person meeting since 2020 on Wednesday.
​Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, will cut output by more than 1 million barrels per day (bpd) at their first in-person meeting si..
Read More
​Voluntary cuts by individual members could come on top of this, making it their largest cut since the start of the COVID-19 pandemic, Reuters quoted sources as saying.

​Voluntary cuts by individual members could come on top of this, making it their largest cut since the start of the COVID-19 pandemic, Reuters quoted sources as saying.
​Despite everything going on with the war in Ukraine, OPEC+ has never been this strong and they will do whatever it takes to make sure prices are supported here, said Edward Moya, a senior analyst with OANDA, in a note.

​Despite everything going on with the war in Ukraine, OPEC+ has never been this strong and they will do whatever it takes to make sure prices are supported here, said Edward Moya, a senior analyst wi..
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Whilst OPEC+ might announce a large cut (in excess of 1 million bpd), in reality, the cut could be much smaller. This is due to most OPEC+ members producing well below their target production levels, ING analysts said in a note.

Whilst OPEC+ might announce a large cut (in excess of 1 million bpd), in reality, the cut could be much smaller. This is due to most OPEC+ members producing well below their target production levels,..
Read More
​Goldman Sachs said a production cut under consideration OPEC+ was justified by the sharp decline in oil prices from recent highs and supported its bullish view.

​Goldman Sachs said a production cut under consideration OPEC+ was justified by the sharp decline in oil prices from recent highs and supported its bullish view.
Concerns about the global economy could cap the upside, said Tina Teng, an analyst at CMC Markets, as investors also look to take profit on gains made in the previous session.
Concerns about the global economy could cap the upside, said Tina Teng, an analyst at CMC Markets, as investors also look to take profit on gains made in the previous session.


In the statement from the national security adviser, Jake Sullivan, and the director of the National Economic Council, Brian Deese, the president was disappointed by the shortsighted decision, while the global economy continues to suffer due to Russian President Vladimir Putin's invasion of Ukraine.
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Despite Washington's outrage, experts on Saudi Arabia and the oil market questioned the move's implications for an already strained bilateral relationship between the countries.

FAQs

  1. What is OPEC +?
    The Organisation of the Petroleum Exporting Countries (OPEC), a coalition of the world's top oil-producing countries and its allies known as OPEC+.
  2. What was the decision reached by OPEC+?
    The decision was made to reduce the production of oil by 2 million barrels per day (BPD).
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