After reducing oil production
US threatens Saudi Arabia with consequences
10/12/2022 10:01 am
Against the express will of the United States, the members of the oil export group OPEC+ are planning to cut their oil production from November. After the US Congress initially called for an end to cooperation with Riyadh, President Biden is now also threatening the consequences.
US President Joe Biden has announced the consequences of OPEC+’s controversial decision to cut oil production. He won’t say exactly what he has in mind, “but that will have consequences,” Biden said in a CNN interview on Tuesday. National Security Council spokesman John Kirby said the relationship with the Saudi-led oil states was being “reassessed”.
The oil-exporting countries united in the OPEC+ group agreed last week on a significant reduction in production in November. The move was widely seen as a diplomatic slap in the face to the US, which had explicitly opposed it. The OPEC+ group consists of the OPEC countries led by Saudi Arabia and ten other partner countries, most notably Russia. They had already cut production from the beginning of October, but only slightly by 100,000 barrels per day. For November, they have now set a limit of two million barrels per day. This is the strongest reduction since 2020 at the beginning of the Corona crisis, the alliance wants to support the price.
With Russia’s attack on Ukraine, oil prices had risen, reaching almost $140 a barrel (159 liters). Since then it had fallen again. The high oil prices have led to high gasoline prices in the USA, which are partly responsible for the high inflation in the country. This is hurting Biden and his Democratic Party ahead of November’s congressional elections. Kirby added that Biden will work with Congress “to consider how relations (with Saudi Arabia) should look going forward.” The US Parliament had previously called for the cessation of all cooperation with Riyadh, since Saudi Arabia had apparently sided with Russia.