WH ‘Disappointed by the Shortsighted Decision by OPEC+ to Cut Production Quotas’

Melanie Arter | October 5, 2022 | 3:13pm EDT
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Representatives of OPEC member countries attend a press conference after the 45th Joint Ministerial Monitoring Committee and the 33rd OPEC and non-OPEC Ministerial Meeting in Vienna, Austria, on October 5, 2022. - The OPEC+ oil cartel meets for the first time face-to-face since Covid curbs were introduced in 2020. (Photo by VLADIMIR SIMICEK/AFP via Getty Images)
Representatives of OPEC member countries attend a press conference after the 45th Joint Ministerial Monitoring Committee and the 33rd OPEC and non-OPEC Ministerial Meeting in Vienna, Austria, on October 5, 2022. (Photo by VLADIMIR SIMICEK/AFP via Getty Images)

(CNSNews.com) – The White House on Wednesday expressed disappointment with OPEC+ for deciding to cut oil production by 2 million barrels per day, just as the administration’s 1 million barrel per day release from the Strategic Petroleum Reserve is set to end in November.

In a statement from National Security Advisor Jake Sullivan and NEC Director Brian Deese, the Biden administration said the decision will hurt lower- and middle-income countries the most:

The President is disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin’s invasion of Ukraine. 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.

The President’s work here at home, and with allies around the world, has helped to bring down U.S. gas prices: since the beginning of the summer, gas prices are down $1.20 – and the most common price at gas stations today is $3.29/gallon. At the President’s direction, the Department of Energy will deliver another 10 million barrels from the Strategic Petroleum Reserve to the market next month, continuing the historic releases the President ordered in March.

The President will continue to direct SPR releases as appropriate to protect American consumers and promote energy security, and he is directing the Secretary of Energy to explore any additional responsible actions to continue increasing domestic production in the immediate term.

The President is also calling on U.S. energy companies to keep bringing pump prices down by closing the historically large gap between wholesale and retail gas prices — so that American consumers are paying less at the pump.

In light of today’s action, the Biden Administration will also consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices.

Finally, today’s announcement is a reminder of why it is so critical that the United States reduce its reliance on foreign sources of fossil fuels. With the passage of the Inflation Reduction Act, the U.S. is now poised to make the most significant investment ever in accelerating the clean energy transition while increasing energy security, by increasing our reliance on American-made and American-produced clean energy and energy technologies.

When asked Wednesday whether the United States views the Saudis as a trustworthy partner in light of OPEC’s decision and whether a production cut will help Russian President Vladimir Putin because it would raise prices, White House Press Secretary Karine Jean-Pierre pointed to Sullivan and Deese’s statement.

So there was a statement on the OPEC decision that went out while we were all in the air.  It came out from Jake Sullivan and Brian Deese. So I just wanted to make sure that you guys are all aware of that. So let me just say a couple of things and just kind of lift up some of the things that came up from that — from — came out of that statement.

So OPEC’s decision to cut productions quotas is shortsighted while the global economy is dealing with the continued negative impact of Putin’s invasion of Ukraine. If there’s a meaningful price impact of OPEC’s decision, it will particularly be on low- and middle-income countries.

The president’s efforts have made progress bringing down U.S. gas prices. Since the beginning of the summer, gas prices are down nearly $1.20, and the most common price at gas stations today is $3.29 per gallon.

The president is determined to ensure that progress continues. At the president’s direction, the Department of Energy will deliver another 10 million barrels from the Strategic Petroleum Reserve to the market next month as part of the historic 180 million barrel release the President ordered back in March, and the president will continue to direct SPR releases as necessary.

He is directing the secretary of energy to explore any additional responsible actions to continue increasing domestic production, which is on track to break a historic record next year, and the president is once again calling on U.S. — U.S. energy companies to keep bringing pump prices down by closing the historically large gap between wholesale and retail gas prices.

In light of today’s actions — action, the president — the president’s administration will also consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices, and lastly, today’s announcement is a reminder of why it is so critical that United States reduce its reliance on foreign sources of fossil — fossil fuels.

With the Inflation Reduction Act, we are making a historic investment in accelerating the energy — the energy — the transition to clean energy. vAs it relates to — to Russia, your — your last question, first: Look, it’s clear that OPEC+ is aligning with — with Russia with today’s announcement, and I’ll leave it — I’ll leave it as that.

As I just laid out, you know, we’re dealing with a time where we’re — we are — you know, the global markets are — the global economy is responding to Putin’s war, and so by making this decision, it is going to have an effect on low and middle — middle- … income countries, and so that is — that is where we are today. So I’ll leave it there.

As to whether the Saudis are a trustworthy partner, the press secretary said, “Look, what we think is that this decision by OPEC+ is one purported self-interest — is a mistake and it’s misguided.”

“What does this do to U.S. relations with Saudi Arabia?” a reporter asked.

“Look, I can speak to this particular decision, and again, it’s a shortsighted decision. It is — its own purported — it’s on its own purported self-interest that OPEC+ made the decision upon, and so, we see it as mistake on this particular decision,” the press secretary said.

“Did the administration actively try to avoid this outcome and talk to OPEC members to avoid this cutdown in production?” a reporter asked.

“So, look, we — and I said this yesterday.  I’ll just reiterate this here — is, like, we are — you know, we’re always in touch with partners, both producers and consumers.  Look, it’s no secret that the president believes that energy supply should meet energy demand and that it is important for the global economy as it faces global challenges, but, again, it is — it should be no surprise that we are in regular touch with our partners,” Jean-Pierre said.

“Did you have any reaction to Exxon reporting near-record profits?” a reporter asked.
 

JEAN-PIERRE:  Yes, I do.  I can give this to you really quickly. Energy companies are making record profits with refiners and retailers also posting margins that are well above — above average. 

As the president has said, these companies need to focus on passing through savings to their customers. The gap between wholesale and retail price of gasoline is too wide. Energy companies need to bring down their retail price.

REPORTER: Karine, if I could just get one in here. You said yesterday that “We’re not going to be considering new releases” from the Strategic Petroleum Reserve. So what is the White House planning to do to keep gas prices from spiking?

JEAN-PIERRE:  So, as you know, we’ve been working on this for months. The president has make — has made — taken historic steps to keep gas prices down. So here’s — you know, so — so gas prices — we haven’t — we’ve seen an increase in the West and the Midwest in recent weeks because of specific refinery issues. 

We’ve called on those refiner — refiners to operate safely but quickly come back online, and we’ve — we’ve been clear and said again today that U.S. energy companies must bring — must keep bringing pump prices down by closing this historic — historically large gap between wholesale and retail gas prices.

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