“OPEC +” agrees to reduce oil production by an average of two million barrels per day

 Reuters quoted sources in Vienna as confirming that the "OPEC +" group agreed today to reduce oil production by two million barrels per day.

The Joint Ministerial Monitoring Committee of the Global Oil Exporters Alliance "OPEC +", which includes ministers of prominent producing countries, agreed to reduce crude production by two million barrels per day in response to the decline in prices.

This came according to what was quoted by "Reuters" agency, quoting 3 sources familiar with the events, and as expected by media reports earlier, and in a move believed to destroy the efforts of the United States to increase supplies and reduce prices.

A disaster for the United States and will cause crises

On Tuesday, CNN reported, quoting a White House document, that "the United States is concerned that a possible decision by "OPEC" to reduce oil production may cause major crises for the country, and can be considered a hostile act."

And a report by the American network stated that the White House “warns that the “OPEC +” meeting may cause great damage to the United States, and that the decision to reduce oil production will be a “complete disaster” for the country.

The United States, in an attempt to persuade its OPEC allies, is proposing to buy back up to 200 million barrels of oil from its OPEC partners, which will be used to refill the US Strategic Petroleum Reserve, which President Joe Biden uses to help lower oil prices.

This is while another US official stated, according to "CNN", that the White House "is in a state of panic and panic."

"We have made clear that energy supplies must meet demand to support economic growth and lower prices for consumers around the world, and we will continue to talk to our partners about that," National Security Council spokeswoman Adrian Watson said in a statement.

A few days ago, the Wall Street Journal reported, quoting participants in the upcoming “OPEC +” meeting, that the coalition countries were “considering reducing oil production by more than one million barrels per day.”

Action to Prevent fluctuations

Saudi Arabia and other members of OPEC Plus, which includes OPEC countries and non-OPEC producers including Russia, say they are seeking to prevent volatility and not target a specific oil price.

Brent crude, the global benchmark, rose today, Wednesday, towards $93 a barrel, after rising yesterday.

The West accuses Russia of using energy as a weapon, and of creating a crisis in Europe that may force it to ration gas and electricity this winter.

In contrast, Moscow accuses the West of using the dollar and financial systems - such as Swift - as a weapon in response to Russia sending troops to Ukraine last February.

Reactions

US President Joe Biden expressed his disappointment over the decision of the OPEC Plus alliance to reduce oil production, and stressed that his administration would seek to reduce the alliance's control over energy prices, according to a statement issued by the White House.

The statement described the OPEC Plus decision as "short-sighted", and said that the decision - which is the largest reduction in oil production since the Covid-19 pandemic - will harm countries that are "already reeling" under the weight of high oil prices in light of a global economy that in turn suffers from the "negative impact". Russia's attack on Ukraine, according to the statement.

The White House considered that the "wrong" decision was in Russia's own interest, and said, "It is clear that OPEC Plus is allied with Russia."

He added that "in light of today's decision, the Biden administration will consult with Congress on additional tools and mechanisms to reduce the control of the coalition of oil-producing countries on energy prices."

On the other hand, Russian Deputy Prime Minister Alexander Novak described the decision taken by the OPEC Plus alliance during its meeting in Vienna today, Wednesday, as "unprecedented", and attributed it to the need to achieve balance in the oil market.

Novak warned - in statements he made to state television - that the trend to impose a ceiling on the price of Russian oil - a step proposed by the European Union as part of new planned sanctions on Moscow - will have a detrimental effect on global markets.

Novak stressed that Russian companies will not send oil supplies to countries that adopt this ceiling.

On Thursday, the US administration seem to escalate its reaction to this event. The White House hinted that it would “re-evaluate the issue of Saudi Arabia’s trade preference with regard to arms sales and defense support,” following the decision of the “OPEC +” group to reduce the collective production limit.

The President of the US National Economic Council, Brian Dees, indicated today, Thursday, that "the administration of President Joe Biden is in the process of consulting with Congress on the issue of Saudi Arabia's commercial preference for arms sales and defense support."

In response to a question about whether Saudi Arabia deserves to obtain weapons and US defense support in light of the decision of the “OPEC +” group, Deiss said: “We will conduct an assessment and consult closely with Congress on a number of issues related to this matter.”

The member countries of the “OPEC +” alliance agreed, yesterday, Wednesday, to reduce the collective production limit by two million barrels per day, in what is considered the largest supply curb since the 2020 agreement, in the midst of the historic price collapse due to the Corona pandemic.

Following the producers' decision, US President Joe Biden expressed his disappointment with the "OPEC +" agreement, stressing the importance of global energy supplies in light of the war in Ukraine.

White House spokeswoman Karen Jean-Pierre said that the “OPEC +” decision to reduce oil production, which is likely to raise prices in Western countries, “shows that the alliance is biased towards Russia.”

And the American network “CNN” reported, earlier, quoting a document of the White House, that “the United States is concerned that a possible decision by “OPEC” to reduce oil production may cause major crises for the country, and it can be considered a “hostile act.”

And a report by the American network stated that the White House “warns that the “OPEC +” meeting may cause great damage to the United States, and that the decision to reduce oil production will be a “complete disaster” for the country.

Read also: The “OPEC +” decision to reduce production .. its political and economic impact on the Biden administration

In turn, the Saudi Energy Minister, Abdulaziz bin Salman, confirmed that the decision of the “OPEC +” group to reduce oil production by two million barrels per day “is not an aggressive move and does not aim to harm anyone.”

As for Russian Deputy Prime Minister Alexander Novak, he announced that the decision of the “OPEC +” alliance to reduce oil production “is an unprecedented decision,” noting that the reason for taking such a decision “is the need to balance the market before winter.”

The story was updated to reflect US updated reaction issued on Thursday.