Joe Biden is having a very unpleasant morning. Despite repeatedly begging OPEC to keep oil prices down in effort to stifle surging consumer prices until at least the midterm elections, it appears that the cartel and its allies could care less about what a senile US president wants.
OPEC and its allies agreed on Wednesday in Vienna to proceed with cutting oil production by 2 million barrels per day come November, which amounts to about 2% of total global demand, marking the sharpest decline in output since the beginning of Covid-19 in 2020. The move came despite major outcry from Washington, and will likely send oil prices higher in an already-tight supply market.
According to OPEC, the decision was made “in light of the uncertainty that surrounds the global economic and oil market outlooks, and the need to enhance the long-term guidance for the oil market, and in line with the successful approach of being proactive, and preemptive, which has been consistently adopted” by its members. The slash in output was much larger than analysts were expecting, creating a huge headache for the Biden administration, which allegedly mobilized all efforts last week convincing the group to maintain production at current levels or higher.
According to CNN which cited people familiar with the situation, the White House used all available resources to lobby the oil cartel ahead of their Vienna meeting, and is now left “having a spasm and panicking.” A defeated Biden said he is “concerned” with OPEC’s decision, going as far as to call the move “a hostile act” and a “total disaster.” The president’s national security advisor Jake Sullivan furiously reminded the cartel how important it is for America to cut its reliance on foreign fossil fuels and invest heavily into the clean energy transition, adding that it will look into curbing the organization’s control over energy prices.
OPEC, for its part, reminded Washington that the group is a “technical organization” rather than a political one, and won’t cater to Biden’s demands even if it means damaging relations with the US.
Information for this briefing was found via OPEC and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
