Biden downplays “surprise” OPEC oil production cut, says it won’t be as “bad as you think”

Justin Sink, Bloomberg April 04, 2023

(Bloomberg) –President Joe Biden downplayed the impact of a surprise OPEC+ announcement that it would slash oil production by more than 1 MMbpd.

“It’s not going to be as bad as you think,” Biden said Monday during a trip to Minnesota, where he was asked about the decision.

Administration officials in Washington have sought to strike a balance between denouncing the move and not further souring relations with Saudi Arabia.

National Security Council spokesman John Kirby told reporters earlier Monday that the U.S. had been given a “heads up” about the announcement. He said the US does not believe “production cuts are advisable at this moment given the market uncertainty.”

Yet at the same time, the White House said the announced cuts occurred in a “different environment” from the production cut last October that prompted Biden to vow “consequences for Saudi Arabia.” Kirby pointed out that crude oil prices had fallen significantly, and said the decision was made by the entirety of the OPEC+ cartel – suggesting the US did not hold the Saudis solely responsible.

The tone was markedly different from the posture the administration took last fall after OPEC+ curtailed production by 2 million barrels per day.

Critics suggested then that Biden was particularly upset because that cut came shortly before November’s midterm elections, with Democrats fearful that voters would punish them over historic inflation driven in part by gasoline prices. Biden had also visited Saudi Arabia earlier in the year and met with Crown Prince Mohammed bin Salman, despite previously vowing to make the Saudi leader a “pariah” over the killing of columnist Jamal Khashoggi.

Still, while the White House said it was given advanced warning of the latest production cut, Kirby said the U.S. did not know what prompted the decision.

“I can’t even begin to speculate why this decision was made,” Kirby said. “We don’t know. And I’m not going to try to guess.”


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