US says “nothing off the table” in response to Opec+ oil cuts

The White House said a day after Opec+ angered Washington with sharp cuts in global oil supplies, the White House said nothing was off the table as it considered answers — including new releases from the US Strategic Petroleum Reserve to curb energy prices.

The Saudi Arabia-Russia-led Opec+ cartel on Wednesday agreed to cut production targets by 2 million barrels a day, or about 2 percent of global oil consumption. Oil markets continued to climb Thursday with Brent crude reaching $94 a barrel.

Brian Deese, director of the White House National Economic Council, called the decision “unnecessary and unwarranted” and said the US would explore further sales from its strategic stockpile, which has already been mined by more than 200 million barrels over the past year.

He didn’t rule out an export ban or limit on the export of gasoline and other refined products when reporters asked if the idea was being considered. “What the President told us to do, and will continue to do, is not to take anything off the table,” Deese said.

The oil industry is increasingly concerned about the prospect of restrictions on the export of refined oil products being introduced in a bid to drive down domestic fuel prices at the pump. US Energy Secretary Jennifer Granholm urged oil refiners in August to build up domestic inventories instead of exporting more fuel.

The energy crisis in Europe would likely be exacerbated by such a move, as the continent imports significant amounts of fuel from the US and will soon shut down all Russian oil imports by sea.

Opec+ approved its production cut after US President Joe Biden paid a controversial visit to Saudi Arabia over the summer to increase oil supplies. He said after meeting Crown Prince Mohammed bin Salman that he expected Saudi Arabia to take “further steps” to increase oil supplies in the coming weeks.

On Thursday, Biden said he had no regrets about his visit. “The trip was not necessarily for the oil. The trip was about the Middle East and about Israel and the rationalization of positions. But it’s a disappointment and says there are problems,” the president told reporters.

He said he hasn’t yet decided how to respond to the Opec+ announcement. “We are examining alternatives. We haven’t decided yet,” Biden said.

The Opec+ decision has given ammunition to lawmakers who have criticized US-Saudi Arabia relations and who have questioned the wisdom of Biden’s about-face on relations with Prince Mohammed.

Three Democratic congressmen said on Wednesday they would introduce legislation mandating the withdrawal of US troops and missile defense systems from Saudi Arabia and the United Arab Emirates.

“We see no reason why American troops and contractors should continue to offer this service to countries that are actively working against us. If Saudi Arabia and the UAE want to help Putin, they should turn to him in their defense,” House Democrats Tom Malinowski, Sean Casten and Susan Wild said in a statement.

Deese said White House officials were disappointed with the Opec+ move because energy supplies remain tight around the world. “If you look at the global energy and oil picture, the lack of supply remains a major challenge,” he said.

The actual fall in production due to the Opec+ group’s lowered target is likely to be closer to 1mn b/d than 2mn b/d as many of its weaker members have struggled to hit production targets in recent months.

“Certainly the impact on production will be significantly less than the announced headline,” Deese said. US says “nothing off the table” in response to Opec+ oil cuts

Adam Bradshaw

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