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The White House on Wednesday responded to OPEC+’s historic reduction of oil, to which President Joe Biden said he is disappointed in the shortsighted decision by the coalition to cut production quotas in the current uncertain macro and geopolitical environment.
The White House also said the Department of Energy will deliver an additional 10 million barrels of oil from the Strategic Petroleum Reserve (SPR) and continue to do so under Biden’s direction to promote energy security in the U.S.
What Happened: The OPEC+ coalition announced a 2 million barrel per day reduction in oil output on Wednesday.
This reduction could reverse weeks of declining oil and gas prices, according to Reuters, despite the U.S.’s pressure on the coalition to retain current quotas. The quota pull comes just two weeks before the midterm elections and threatened to push gas prices back to near summer levels.
The reduction of OPEC+ oil underscored two key points: the U.S. remains far too dependent on foreign energy, and the benefits of Biden’s “Inflation Reduction Act,” which bolstered the manufacturing of and transitions America to clean energy, are yet to be seen.
Read More: Exxon Mobil Is A Buy With Signs Of Strong Third-Quarter Earnings, Says Bank Of America
Why It Matters: The sharp drop in OPEC+ production came amid an even sharper decline in the energy markets — which have had a historic run in the first half of 2022 — with fears swirling a global recession will depress energy demand.
Some saw this as OPEC’s way of controlling the price of energy.
In its response, the White House said it will consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices.
Since the end of June, Brent crude declined about 20%. Following Russia’s invasion of Ukraine in March, the international benchmark reached a high of $139 per barrel.
More than 40% of the world’s oil production is controlled by OPEC and its allies, who want to avoid demand for their barrels decline as a result of a severe downturn in use in China, the U.S. and Europe.
Photo: Pla2na via Shutterstock
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Image and article originally from www.benzinga.com. Read the original article here.