The Biden administration’s scramble to avoid another jump in US gas prices on Wednesday came in a major blow after OPEC and Russia approved significant oil output cuts.
Oil jumped to $87 on Wednesday after OPEC+, a group of oil-producing countries, which includes Russia, slashed a production limit of 2 million barrels per day. The cuts will mark the biggest drop in OPEC+ oil output since 2020 and will put additional pressure on global energy markets already battered by the Russia-Ukraine conflict, Bloomberg told,
The cuts were approved even after the Biden administration attempted a “full-scale pressure campaign” to persuade OPEC+ not to cut production, CNN toldCiting sources familiar with the matter.
OPEC+ ministers are seeking to raise the price of oil, which has plunged in recent months as fears of a possible global recession mount. Experts had already warned that tightening energy markets this winter – with Europe on the verge of a full-fledged energy crisis – could send oil prices too high.
Meanwhile, the national average price of a gallon of gas rose to $3.83 after a steady rise on Wednesday. The trend is a political headache for President Biden and other Democrats ahead of a midterm election that will determine which party controls Congress.
Republican lawmakers and other critics accused the Biden administration of prematurely taking credit for the drop in gas prices as they fell from a record high of $5.016 in June. With prices rising once again, there are signs White House officials are scrambling to avert the resulting political backlash.
The White House has tapped the Energy Department to estimate the impact of a potential ban on experts on gasoline, diesel and other refined petroleum products produced in the US.bloomberg informed of. Domestic oil producers oppose the idea, arguing that the sanctions would disrupt struggling energy markets and only lead to higher prices for American motorists.
Meanwhile, Biden has publicly targeted US oil companies during the recent price rally.
As devastating Hurricane Ian struck last month, Biden issued a “warning to oil and gas industry executives: Don’t — let me repeat, don’t — use it as an excuse to raise gasoline prices or upset the American people.” Do not use.”
As reported by The PostExperts say the Biden administration’s restrictive policy stance on domestic energy producers has exacerbated the price problem.
OPEC+ cuts are another blow to the White House. Biden visited Saudi Arabia earlier this year to request additional oil production, but the visit was widely considered a failure After OPEC announced only a modest increase.
According to Quincy Crosby, chief global strategist at LPL Financial, the cuts, while massive, were “less than the market predicted”.
“Russia, heavily dependent on income from oil exports, was seeking huge cuts to drive prices higher and ensure a stream of revenue to support its war effort,” Crosby said.