An Austrian soldier guards the doorway to the OPEC headquarters on October 4, 2022 on the eve of the forty fifth Meeting of the Joint Ministerial Monitoring Committee and the thirty third OPEC and non-OPEC Ministerial Meeting held on October 05, in Vienna, Austria.Â
Joe Klamar | AFP | Getty Images
WASHINGTON — A desperate, last-ditch effort by the Biden White House to persuade OPEC+ members to vote against a proposed production cut at Wednesday’s meeting in Vienna failed, because the oil producing cartel announced a larger-than-expected production cut of two million barrels per day.
Shortly after the announcement, President Joe Biden told reporters on the White House he thought the cut was “unnecessary,” although he said he had yet to see all the main points.
related investing news
Following Biden’s remark, White House officials said that the president was “disenchanted by the shortsighted decision by OPEC+ to chop production quotas while the worldwide economy is coping with the continued negative impact of Putin’s invasion of Ukraine.”
Until Wednesday, the White House had avoided making any public comments that suggested there was friction between Washington and the leading OPEC member states.
But behind the scenes, members of the Biden administration had been “pulling out all of the stops,” reaching out to partners within the Persian Gulf and warning of drastic consequences to the worldwide economy if a production cut was announced, in response to multiple people acquainted with the situation.
The White House even tried, unsuccessfully, to enlist corporations to talk out against a production cut, in response to individuals who asked to stay anonymous to explain private conversations.
Wednesday’s announcement was OPEC’s first major production cut for the reason that early days of the Coronavirus pandemic in 2020.
With U.S. midterm elections only a month away, any increase to gas prices resulting from higher oil prices can be a political gift to Republicans, who’ve blamed Biden for the record high gas prices brought on primarily by Russia’s invasion of Ukraine.
As a member of the expanded OPEC+ group, Russia is poised to profit significantly from the choices made at Wednesday’s meeting, which was attended in person by Russian Deputy Prime Minister Alexander Novak (below).
Deputy Prime Minister of Russia Alexander Novak arrives for the forty fifth Joint Ministerial Monitoring Committee and the thirty third OPEC and non-OPEC Ministerial Meeting in Vienna, Austria, on October 5, 2022.
Vladimir Simicek | AFP | Getty Images
The Kremlin is heavily depending on oil export revenues to fund its war in Ukraine, and its own petroleum production has fallen for the reason that start of the invasion.
The newly announced production cut will buoy Russia’s oil revenues heading into winter, when demand for Russian energy from Europe and central Asia typically rises.
This is very necessary for Moscow provided that the European Union is preparing to impose a Russian oil embargo, and G-7 nations are finalizing plans to impose a limit on the value that G-7 nation oil transporters are allowed to pay for Russian oil they plan to ship to Asia and Africa.
