Biden to deplete oil reserves following OPEC production cut

WASHINGTON (Reuters) – President Joe Biden has called on his administration and Congress to explore ways to boost U.S. energy production and reduce OPEC’s control over energy prices after the cut short-sighted production of the cartel, the White House announced on Wednesday.

The Saudi-led OPEC+ cartel at a meeting in Vienna on Wednesday ignored calls from the White House to keep oil flowing and agreed to cut production by 2 million barrels a day, its cuts to largest production since the 2020 COVID-19 pandemic.

The move drew a sharp response from Biden that underscores the growing rift between the United States and Saudi Arabia over energy policy.

“The President is disappointed with OPEC+’s short-sighted decision to cut production quotas as the global economy faces the continued negative impact of (Russian President Vladimir)’s invasion of Ukraine. Putin,” National Security Advisor Jake Sullivan and National Economic Council Director Brian Deese said. said in a statement.

Biden has warned that he will now continue to lead releases from the country’s Strategic Petroleum Reserve “if necessary,” a change from previous comments from the White House that it would end the drawdown in the coming weeks.

Earlier this year, the Biden administration announced the largest ever sale from the reserve: 180 million barrels for six months starting in May. Last month, it extended that historic sale until November, as only around 155 million barrels had been sold. It now aims to sell 165 million through November.

As a result, the amount of oil in the reserve has fallen to the lowest level since July 1984. It now holds around 416 million barrels of oil, well above what the United States requires due to its membership in the International Energy Agency, at sites on the coasts of Texas and Louisiana.

Rising oil and fuel prices are a risk for Biden’s fellow Democrats as they seek to retain control of Congress in the Nov. 8 midterm elections.

Biden also pledged to consult with Congress on additional tools to reduce OPEC’s control over energy prices, a potential reference to a decades-long effort to open the cartel up to antitrust lawsuits for orchestrating supply reductions.

The so-called NOPEC bill, which has been mooted many times over the past 20 years but never signed into law, was easily passed by a Senate committee in May.

The White House has previously expressed concerns about the unintended consequences of the bill.

The White House is also worried about the cut cementing Saudi Arabia’s closer cooperation with Russia, also an OPEC+ member, as oil revenues fund Moscow’s war machine in Ukraine.

“Listen, it’s clear that OPEC Plus is aligning with Russia with today’s announcement,” White House spokeswoman Karine-Jean Pierre told reporters aboard Wednesday. ‘Air Force One.

(Reporting by Susan Heavey and Jarrett Renshaw; editing by Tim Ahmann and David Gregorio)

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