White House accuses Opec+ of aligning with Russia

[Mr. Sparkle]

Source: FT.com

The White House has accused Opec+ of aligning with Russia after Saudi Arabia led the group in agreeing deep oil production cuts, prompting a backlash from countries already battling surging energy inflation triggered by Moscow's invasion of Ukraine. The Opec+ group said it would reduce production targets by 2mn barrels a day, equivalent to 2 per cent of global supply, following its first in-person meeting in two years in Vienna. The actual cut in output is likely to be closer to 1mn b/d as many weaker members have struggled to hit production targets in recent months.

The decision to cut came despite extensive lobbying by the US government before the meeting and marks a significant breach with the Biden administration, which is seeking to drive down oil and petrol prices ahead of crucial midterm elections in November and to starve Russia of energy revenues. The Biden administration criticised the move on cuts, saying it was a "shortsighted decision" at a time when "maintaining a global supply of energy is of paramount importance". White House spokesperson Karine Jean-Pierre told reporters on Air Force One it was "clear" Opec+ was "aligning with Russia".

Saudi Arabia's energy minister Prince Abdulaziz bin Salman dismissed suggestions that the cartel's cuts would hurt oil consumers, arguing instead that the group's actions were intended to encourage long-term investment in oil production. In response to the Opec+ decision, the US said it would continue to release oil from its strategic stockpiles "as appropriate" and was exploring "additional responsible actions" to lift domestic oil supply. Biden will also work with Congress on legislation to “reduce Opec’s control over energy prices”, its statement added, in an apparent reference to anti-cartel legislation known as NOPEC that has long been considered by US lawmakers but never passed.


Read more: https://www.ft.com/content/64d35a40-5144-44f6-afca-c8b88c9d0ad5

[PortTack]

1. Of course! Help elect republicans, hurt all of the EU.

They are counting on EU weakening and giving in to poopin’s demands..ain’t happening!

[TomCADem]

19. The Question is Whether US Petroleum Industry Encouraged Move...

…to aid Republicans during the midterms. Remember Trump actually encouraged OPEC to cut production during his presidency to aid the US oil industry to the detriment of consumers.

https://www.reuters.com/article/us-global-oil-trump-saudi-specialreport-idUSKBN22C1V4

In an April 2 phone call, Trump told Saudi Crown Prince Mohammed bin Salman that unless the Organization of the Petroleum Exporting Countries (OPEC) started cutting oil production, he would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the kingdom, four sources familiar with the matter told Reuters.

The threat to upend a 75-year strategic alliance, which has not been previously reported, was central to the U.S. pressure campaign that led to a landmark global deal to slash oil supply as demand collapsed in the coronavirus pandemic - scoring a diplomatic victory for the White House.

Trump delivered the message to the crown prince 10 days before the announcement of production cuts. The kingdom’s de facto leader was so taken aback by the threat that he ordered his aides out of the room so he could continue the discussion in private, according to a U.S. source who was briefed on the discussion by senior administration officials.

The effort illustrated Trump’s strong desire to protect the U.S. oil industry from a historic price meltdown as governments shut down economies worldwide to fight the virus. It also reflected a telling reversal of Trump’s longstanding criticism of the oil cartel, which he has blasted for raising energy costs for Americans with supply cuts that usually lead to higher gasoline prices. Now, Trump was asking OPEC to slash output.

[Rural_Progressive]

2. If he weren't such a class act

Jimmy Carter would be saying I told them so, I warned them and they ignored me.

[Lovie777]

3. Now world, see what Oil Companies owned by countries can do .....

like blackmail.

[FBaggins]

4. ??? This is news?

OPEC created "OPEC+" three years ago with their "charter of cooperation" - and it was an open secret well before then

[Fullduplexxx]

5. Time to make what they have useless

[regnaD kciN]

17. I'm glad I bought a hybrid...

...and have reduced my annual mileage dramatically since the pandemic.

[Irish_Dem]

7. The US has been very foolish to let Saudi/Russia/China have so much leverage.

They control our economy and elections.

And we are afraid or powerless to confront them.

[TomCADem]

20. Special Report: Trump told Saudi: Cut oil supply or lose U.S. military support - sources

People seem to ignore how Republicans and right wing media have been cheerleading for Russia and pushing for cuts in production even before the war. The timing of the current cut was designed to impact the 2022 midterms in an effort to aid Republicans who will push to roll back climate initiatives and support for Ukraine.

https://www.reuters.com/article/us-global-oil-trump-saudi-specialreport-idUSKBN22C1V4

In an April 2 phone call, Trump told Saudi Crown Prince Mohammed bin Salman that unless the Organization of the Petroleum Exporting Countries (OPEC) started cutting oil production, he would be powerless to stop lawmakers from passing legislation to withdraw U.S. troops from the kingdom, four sources familiar with the matter told Reuters.

The threat to upend a 75-year strategic alliance, which has not been previously reported, was central to the U.S. pressure campaign that led to a landmark global deal to slash oil supply as demand collapsed in the coronavirus pandemic - scoring a diplomatic victory for the White House.

Trump delivered the message to the crown prince 10 days before the announcement of production cuts. The kingdom’s de facto leader was so taken aback by the threat that he ordered his aides out of the room so he could continue the discussion in private, according to a U.S. source who was briefed on the discussion by senior administration officials.

The effort illustrated Trump’s strong desire to protect the U.S. oil industry from a historic price meltdown as governments shut down economies worldwide to fight the virus. It also reflected a telling reversal of Trump’s longstanding criticism of the oil cartel, which he has blasted for raising energy costs for Americans with supply cuts that usually lead to higher gasoline prices. Now, Trump was asking OPEC to slash output.

[oldsoftie]

8. We simply MUST pressure US companies to raise their production. Whatever it takes

within reason. They must be given a reason to stand up to Wall St which is where much of the pressure to hold the line comes from. There is a WAR going on & I don't want to hear about "going green". Thats not going to happen fast enough to help THIS problem or fight THIS war or win THIS election or the NEXT one.

[Lonestarblue]

9. A lot of US oil is simply exported because it is the wrong kind of oil for US refineries.

Most US oil is different from the oil we import, and our refineries are geared toward imported oil. With better policy—and less obstruction from Republicans and oil companies—the US could have used the direct subsidies it already provides to fossil fuel companies to switch refineries to process US oil. That did not happen, and we are still beholden to the Middle East for oil.

“The U.S does indeed produce enough oil to meet its own needs. According to the U.S. Energy Information Administration (EIA), in 2020 America produced 18.4 million barrels of oil per day and consumed 18.12 million. And yet that same report reveals that the U.S. imported 7.86 million barrels of oil per day last year.
…
Crude is graded according to two main metrics, weight and sweetness. The weight of oil defines how easy it is to refine, or break down into its usable component parts, such as gasoline, jet fuel and diesel. Light crude is the easiest to handle, heavy is the most difficult, with intermediate obviously somewhere in between. The sweetness refers to the sulfur content of unrefined oil. The sweeter it is, the less sulfur it contains.

Most of the oil produced in the U.S. fields in Texas, Oklahoma, and elsewhere is light and sweet, compared to what comes from the Middle East and Russia. The problem is that for many years, imported oil met most of the U.S.’s energy needs, so a large percentage of the refining capacity here is geared towards dealing with oil that is heavier and less sweet than the kind produced here.

A coordinated, forward-looking energy policy over the last few decades would have targeted that issue through subsidies and incentives. That money has been paid out anyway: it wouldn’t have been hard to use it to make America truly energy independent. However, politicians, it seems, would rather keep a situation where periodic energy crises give them a cudgel with which to beat an incumbent.”

https://www.nasdaq.com/articles/america-produces-enough-oil-to-meet-its-needs-so-why-do-we-import-crude

[oldsoftie]

12. I know WE can't use all we can produce, but other countries can.

Adding supply to the world market will lower prices. The total market sets the price and the more available for refining the better it will be

[LT Barclay]

15. I've also read we are a net exporter of refined products.

[former9thward]

11. Including fracking?

[oldsoftie]

13. If thats what it takes yes. Fracking would be much faster than drilling.

We are at war with Russia, China & Trump. Whatever it takes to defeat all three we need to do. Because lose to them & you'll never get ANY "green" programs in the future.
The US produces oil cleaner than any other country in the world. Russia is the dirtiest. Big surprise.
We need to supply more right now like it or not

[LT Barclay]

16. First I'd like to know the status of the existing wells. If I remember correctly (which happens

on occasion) US companies were closing down wells in the Gulf of Mexico becuase prices were so low.
Considering that the oil companies are trying to punish us all for having the audacity to elect a democrat to the office of president and he dared to eliminate some of the leases to offshore oil fields, I think it is quite likely they are holding back on production.
I really should find a way to invest, because I would have nearly bet the house that prices would go up if Biden won. I would still bet that price will go down if the house and/or senate changes majorities.

[oldsoftie]

18. I would like to know too. I do know when 1 is shut down it takes awhile to restart.

Don't know for sure, but I've heard that wells are capped in concrete too.
I'd like to know for sure

[NickB79]

24. We just suffered a summer of catastrophic climate change effects

And you're calling for more fossil fuels to be burned.

[Scalded Nun]

10. Cut off all aid, weapons sales, and shutter our bases.

We should not be in bed with these evil murderers anyway.

[StormKing]

14. I'm glad the Biden administration

I'm glad the Biden administration is calling them out on this.

[Slammer]

21. White House Press Secretary tweet

"It's clear that OPEC+ is aligning with Russia with today's announcement."


I'll repeat what I wrote earlier on Reddit about the story:

It's clear that OPEC+ likes money. Exactly why they like money is a mystery which the White House press secretary might never solve.

Seriously, I miss the old press secretary. This seems like an unnecessarily strong slap in the face to oil-producing countries which could have been better dealt with through backroom negotiations...then addressed with less of a slur if the negotiations had been unsuccessful.

The price per barrel of oil has dropped by a third since June, from $120 per barrel to $80 per barrel now.

The price last December was $78 per barrel. So OPEC+ is taking this action to stop current prices from continuing to fall, a fall which would put the price below the pre-invasion price level.

If your personal income dropped by a third over the course of three months, you'd probably try to stop it from dropping further as well. That wouldn't be an indication that you've come out in support of Russia.

[TomCADem]

22. The Fact That OPEC is announcing a cut in production shortly before the election...

…and just as the Ukraine is making progress against Russia cannot be ignored. OPEC did not announce similar costs back when oil was running at record lows under Trump who famously blew off human rights abuses by Saudi Arabia. So, to suggest that OPEC cut in production is not an effort to bolster Russia or effect US elections seems a bit tough to swallow.

[Kid Berwyn]

23. Where would OPEC get such an idea?