The United States government has criticised the decision by the Organisation of Petroleum Exporting Countries (OPEC) and its allies to cut monthly oil output by 2 million barrels per day in November.
In a statement on Wednesday, the White House National Security Adviser Jake Sullivan and National Economic Council director Brian Deese said President Joe Biden was “disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin’s invasion of Ukraine”.
It indicated the U.S. government may take steps against OPEC’s monopoly of global oil prices.
“In light of today’s action, the Biden Administration will also consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices,” it said.
Earlier on Wednesday, OPEC and its allies agreed to cut oil output by 2 million barrels per day in November.
It is the deepest cut by OPEC+ since the 2020 COVID pandemic. The decision came despite pressure from the United States and others for the group to pump more.
OPEC said it took the decision “in light of the uncertainty that surrounds the global economy and oil market outlooks, and the need to enhance the long-term for the oil market.”
The cut, aimed at shoring up prices that fell as low as $90 recently, means production quota to producers like Nigeria will be reduced. Nigeria has for months failed to meet higher quotas due to massive oil theft and other production problems.
With an average of 1,083,899 barrels per day in July, Nigeria’s crude oil production plunged below one million barrels per day (972, 394 bpd) in August, the lowest ever in several years.
Nigeria’s oil supply was cut from 1.826 million barrels per day in August to 1.742 barrels per day representing a cut of 84,000 barrels.
The U.S. said the new cut will negatively impact lower and middle-income countries the most.
“At a time when maintaining a global supply of energy is of paramount importance, this decision will have the most negative impact on lower- and middle-income countries that are already reeling from elevated energy prices,” the statement said.
It said Mr Biden has directed the country’s Department of Energy to release another 10 million barrels from the country’s strategic reserve to keep prices low.
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