OPEC+ agrees deep oil production cuts

Saudi Arabia rebuffed criticism it was colluding with Russia

VIENNA/LONDON:

OPEC+ agreed steep oil production cuts on Wednesday, curbing supply in an already tight market, causing one of its biggest clashes with the West as the US administration called the surprise decision short-sighted.

OPEC’s de-facto leader Saudi Arabia said the cut of 2 million barrels per day (bpd) of output – equal to 2% of global supply – was necessary to respond to rising interest rates in the West and a weaker global economy.

The kingdom rebuffed criticism it was colluding with Russia, which is included in the OPEC+ group, to drive prices higher and said the West was often driven by “wealth arrogance” when criticising the group.

The White House said President Joe Biden would continue to assess whether to release further strategic oil stocks to lower prices.

“The president is disappointed by the short-sighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of (Russian President Vladimir) Putin’s invasion of Ukraine,” the White House said.

Biden faces low approval ratings ahead of mid-term elections due to soaring inflation and has called on Saudi Arabia, a long-term US ally, to help lower prices.

Published in The Express Tribune, October 6^th, 2022.

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