Joe Biden Fails Again As OPEC+ Announces Oil Supply Reduction by 1.16M Barrels a Day 

YEREVAN (CoinChapter.com) — US President Joe Biden’s foreign diplomacy has failed again.

The extended Organization of the Petroleum Exporting Countries (OPEC+) has announced it will reduce oil production by 1.16 million barrels daily from May 2023 to year-end. The development comes as a massive victory for Russia, which has been at loggerheads with the West since its unilateral invasion of Ukraine over a year ago.

The White House was quick to slam the decision as “inadvisable.”

The announcement has caught the Biden Administration and its allies off guard. It is a stark display of the failing relationship between the United States and Saudi Arabia, the leader of OPEC. 

The organization was founded on September 14, 196, by the Islamic Republic of Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. It currently comprises 13 member countries. However, other Non-OPEC countries, including Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan, collaborate with the organization in the format of OPEC+. 

Riyadh and Moscow have announced they will cut production by 500,000 barrels per day (bpd). The United Arab Emirates (UAE) will reduce outputs by some 144,000 bpd, while Iraq has pledged to decrease production by 211,00 bpd around the same time. 

Moreover, other players, including Kuwait, Algeria, and Oman, have also announced plans to cut 128,000, 48,000, and 40,000 barrels per day, respectively. 

The announcement has already caused oil prices to jump over 6% to cross the $85 mark. 

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Vladimir Putin Wins Big 

In October 2022, the oil cartel group announced a production cut of about 2 million barrels per day. The decision, which came just weeks before the US midterm elections, received a strong response from Washington. However, these were nothing but ‘hot air.’ 

The White House saw the decision as a ‘geopolitical move” in support of Russia. 

“It’s clear that OPEC+ is aligning with Russia with today’s announcement,”  

White House spokesperson Karin Jean-Pierre told back then. 

While the Biden Administration swore “consequences” for Saudi Arabia, it took no concrete steps against it. If anything, Washington has tried to please Riyadh, praising it at every opportunity. 

Meanwhile, the Energy Ministry of Saudi Arabia has claimed it is aimed at supporting the stability of the oil market.

However, according to a recent Financial Times report, the decision was also influenced by another folly of the Biden Administration. Last week, the US Government publicly ruled out new crude oil purchases to refill its Strategic Petroleum Reserves.

This has reportedly angered Riyadh, causing it to decrease production to impact oil prices.

At the end of March 2022, President Bident announced his administration would release 180 million barrels of oil from the Strategic Petroleum Reserves. 

The US crude oil reserves are currently a little over 370 million barrels. 

Biden Administration Unhappy with OPEC+

Stumped at yet another surprise announcement, the Biden Administration was quick to slam the organization. While nobody in the Saudi-Russia-led block seems to care, the White House called the move unwise. 

“We don’t think cuts are advisable at this moment given market uncertainty – and we’ve made that clear,” 

a spokesperson for the National Security Council said.

Earlier this month, the White House had maintained that Russia would reduce oil production. But, with so many countries now joining in support of Russia, President Biden has some explaining to do. 

US citizens are now left wondering why all these engagements with Riyadh failed to produce results. Last August, Joe Biden visited Saudi Arabia to rally support against Russia. However, Moscow has been more successful in gaining the Kingdom’s trust. 

Saudi Arabia joined the Shanghai Cooperation Organization (SCO) last week in what came as a further blow to the United States. While China leads the SCO, Russia is dominant in the political, security, and trade alliance. 

While the status of the US is constantly falling, Biden has announced he plans to run for re-election. As a result, US voters will have many questions for him and his Democratic party.