Reacting to the oil cartel OPEC’s (Organization of the Petroleum Exporting Countries) decision to cut production, the White House said U.S. President Joe Biden was “disappointed”, calling the decision “shortsighted”.
“At a time when maintaining a global supply of energy is of paramount importance, this decision will have the most negative impact on lower- and middle-income countries that are already reeling from elevated energy prices,” U.S. National Security Advisor Jake Sullivan and National Economic Council Director Brian Deese said via a statement released shortly after OPEC Plus – a group led by Saudi Arabia (and including Russia and other oil exporters in the ‘Plus’ or expanded version) - announced its decision, in Vienna, to cut production by 2 million barrels per day or about 2% of global supply.
The statement said the President would consult with the U.S. Congress on mechanisms available to reduce OPEC’s control of energy prices. The cut in Opec Plus production creates upward pressure on oil prices which have fallen to about $90 per barrel from about $120 per barrel in early June.
It also works to undermine curbs on the price that Russian oil can fetch on the market. Last month, the Group of Seven (G7) economically advanced countries had agreed in principle to implement a price cap on Russian oil in order to limit the revenues Moscow can earn to fund its continuing invasion of Ukraine.
India has not committed to joining the G7 Russian oil price cap. Citing national interest reasons, India had defended its move to buy Russian oil at discounted prices despite pressure not to do so from the U.S. and others. A price cap would work at the upper end of the price spectrum, while India has been buying discounted oil.
“We are a $2,000 per capita economy. The price of oil is breaking our back. This is our big concern,” External Affairs Minister S. Jaishankar had said in Washington last week, standing beside U.S. Secretary of State Antony Blinken at a joint press appearance.
The U.S. has had a “positive dialogue” with India and China on the G7 price cap, U.S. Assistant Secretary of the Treasury for economic policy, Ben Harris, said in London on Wednesday, as per a Reuters report.
