Saudi Arabia snubs Biden as OPEC CUTS oil production by 2 MILLION barrels a day: Gas prices set to rise HIGHER after White House 'begged middle east nations not to cut output' just five weeks before midterms
October 5, 2022
American drivers will face another increase in gas prices.
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- The cut is OPEC+'s largest since the start of the COVID-19 pandemic
- It could help Russia keep financing its illegal invasion of Ukraine despite the West's efforts to cut oil and gas as a source of revenue for Putin's war machine
- The White House was 'having a spasm and panicking' over the potential outcomes of OPEC's decision, an unnamed administration official told CNN
- Biden aides took victory laps when gas prices fell at a record pace this summer
- They have been relatively silent on the issue as they start to creep back up
- The president told reporters that he 'needs to see the details' of OPEC+'s announcement when asked for reaction on Wednesday
- National Security Council official John Kirby downplayed the likely effects in an interview on Fox News and said the US needs to be less dependent on foreign oil
American drivers could face another increase in gas prices as the OPEC+ alliance announced it is cutting oil production by up to two million barrels a day in what could end up being a massive setback for the Biden administration.
Energy ministers from the OPEC cartel, whose leading member is Saudi Arabia, and allied non-members including Russia met in person at the group's Vienna headquarters for the first time since early 2020.
Their announced production cutback on Tuesday is the largest since the start of the COVID-19 pandemic.
It stands to be a big boost for Moscow, despite the West's efforts to choke off oil and gas revenues as a source of cashflow funding Russia's illegal invasion of Ukraine.
It comes after oil barrel prices dropped roughly a quarter in just three months, now around $90, amid fears of a looming global recession.
However, some parts of the US have seen prices jump back up again by up to 60 cents per gallon, according to the Washington Post, underscoring the already-precarious environment.
President Joe Biden was asked about OPEC+'s decision as he boarded Marine One ahead of a visit to hurricane-ravaged Florida but told reporters he 'needs to see the details.'
The announcement's effect on the pumps is not yet certain, but the decision as left the Biden administration scrambling to avoid a 'total disaster' according to a CNN report.
OPEC's decision after their Wednesday meeting could force prices at the pump back up after the White House celebrated them falling at a record pace this summer. They have already begun to inch back up in recent weeks.
But a sudden spike would be an especially concerning setback with the November midterm elections just over a month away.
One official told CNN that the White House is 'having a spasm and panicking' over the potential outcome.
Gas prices dropped over the summer from record highs after the White House drained the US Strategic Petroleum Reserves.
High level officials across economic and foreign policy have reportedly been lobbying allies in the Middle East to vote against cutting production.
DailyMail.com has reached out to the White House National Security Council for comment.
John Kirby, the National Security Council's Coordinator for Strategic Communications, downplayed the cut's effect during an interview on Fox News Wednesday morning.
'[T]hey are adjusting back their numbers down a little bit here. OPEC plus has been saying and telling the word they're producing 3.5 million more barrels than they actually are,' Kirby said.
'So, in some ways this announced decrease really just kind of gets them back into more aligned with actual production.'
He added that there were no 'dramatic shifts in the price of oil,' noting that Wednesday's prices remain in the low 90s.
Press Secretary Karine Jean-Pierre was pressed on Tuesday about the White House's earlier victory laps over falling gas prices, which has translated into comparative silence as they creep up again.
'You said the president was responsible for gas prices coming down. Is the president responsible for gas prices going up?' Fox News reporter Peter Doocy asked at Jean-Pierre's regular press briefing.
She answered, 'So, it's a lot more nuanced than that.'
Jean-Pierre pointed out that gas prices have risen across the globe and chalked the spikes up to 'the [COVID-19] pandemic and Putin's war' in Ukraine.
'We understand there is more work to do, we've never said we are done here,' the Biden official said.
'But we have seen, the reality is, we have seen the fastest decline in gasoline prices in over a decade. That's because of what this president has done.'
A production cut could benefit Russia by establishing higher prices ahead of a European Union ban on most Russian oil imports, a sanction over the invasion of Ukraine that takes effect at the end of the year, analysts at Commerzbank say.
Oil prices surged this summer as markets worried about the loss of Russian supplies from sanctions over the war in Ukraine, but they slipped as fears about recessions in major economies and China's COVID-19 restrictions weighed on demand for crude.
It's unclear how much impact a production cut would have on oil prices - and thus gasoline prices - because members are already unable to meet the quotas set by OPEC+.
DOOCY TIME: "You've said the President was responsible for gas prices coming down. Is [he] responsible for gas prices going up?"— Curtis Houck (@CurtisHouck) October 4, 2022
KJP: "So, it's a lot more nuanced than that...You know this. There have been global challenges...There's been pandemic and...Putin's war." pic.twitter.com/QrbOKJzay5
Yet Saudi Arabia may be unwilling to strain its relationship with Russia even if the world's largest oil exporter had any reservations about cutbacks and has recently has drawn leaders from Biden to German Chancellor Olaf Scholz to talk about energy supplies.
The American president's meeting with Saudi Arabian Crown Prince Mohammed Bin Salman drew ire from Republicans back at home.
GOP lawmakers accused Biden of 'begging' for oil from a known human rights abuser while hammering him for not doing more to expand domestic production.
Kirby pushed back on Fox News Wednesday, asserting that Biden's trip to Saudi Arabia was 'not about oil.'
He did concede to calls mostly coming from the right that the US needs 'to be less dependent on OPEC+ and foreign producers of resources like oil.'
'That's why the president did increase the draws from the Strategic Petroleum Reserve, to try to help stabilize this,' Kirby said.
'And it is also why the president has issued more leases now, thousands more leases, for drilling here in the continental United States, that oil producing companies haven't taken advantage of fully.'
Republican lawmakers have nevertheless begun to hammer the Biden administration after OPEC+'s production cut was announced.
'We need to unleash American energy production. It’s ridiculous that we are relying on foreign powers for oil when less than 2 years ago we were a net exporter of energy,' GOP Rep. Billy Long wrote on Twitter.
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