The Biden administration asked Saudi Arabia, the de facto leader of the OPEC group of oil producers, to postpone its decision on oil output for the month, the kingdom said in a statement. The Saudis, for their part, refused, and in early October OPEC+ – which includes non-OPEC oil exporters such as Russia – announced the supply cut Its largest since 2020, amounting to 2 million barrels per day starting in November. That means tighter supplies and higher prices at a time of already high inflation and worries about a global recession, which has angered US lawmakers who are now calling for a “reassessment” of relations with the Saudi kingdom.
The Saudi government defended its move and said that all OPEC decisions are based on forecasts and economic needs. According to it, all economic analyzes indicate that postponing the OPEC+ decision by a month, as proposed, would have negative economic consequences.
In response to the Saudi claims, Pentagon spokesman John Kirby accused the kingdom of aiding Russia’s revenues and undermining the impact of Western sanctions on Moscow in its war in Ukraine. According to him, they presented the Saudis with an analysis according to which there is no justification for cutting oil production and that they can wait for the next OPEC meeting to see how things develop. Kirby also claimed, without giving examples, that other OPEC members opposed Saudi Arabia’s move and said that they are examining their relations with it In light of these developments.
On Tuesday, President Joe Biden said there would be “consequences” for Saudi Arabia’s oil production cuts, which the kingdom is carrying out in coordination with other OPEC members and non-OPEC allies such as Russia. Lawmakers in the US have urged the reduction of military sales to Saudi Arabia, America’s top arms buyer, and are encouraging the passage of antitrust legislation against OPEC. Riyadh has denied the accusations that they are politically motivated.
A barrel of WTI oil trades for $88.9 while a barrel of Brent oil trades for $94.2.
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