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US ‘Very Worried’ About ‘Unhelpful & Unwise’ Move by OPEC+ to Cut Oil Output - Treasury

CC0 / / Oil rig
Oil rig - Sputnik International, 1920, 10.10.2022
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The Organization of the Petroleum Exporting Countries and its major non-member partners opted to cut oil output by 2Mln barrels per day (bpd) to spur a recovery in crude prices despite the Biden administration's diplomacy in Gulf nations aimed at increasing production.
US Treasury secretary Janet Yellen has branded the move by the Organization of the Petroleum Exporting Countries (OPEC) and its major non-member partners to pare back output by 2Mln barrels per day “unhelpful” for the global economy.

"I think OPEC's decision is unhelpful and unwise - it’s uncertain what impact it will end up having, but certainly, it’s something that, to me, did not seem appropriate under the circumstances we face," Yellen said in an interview for the Financial Times published on Sunday.

Yellen added that "we’re very worried about developing countries and the problems they face".
Ahead of the 2022 Annual Meetings of the International Monetary Fund and the World Bank Group in Washington from 10 to 16 October, Yellen said the move by the oil production cartel led by Saudi Arabia risked undermining the world economy in the context of soaring global inflation caused in part by high energy costs.
“I think we’re going to exchange views on whether our countries are addressing these problems, and try to consider whether our collective reaction adds up to something that is sensible, and the best we can do, in that difficult environment,” Yellen said of the meetings' agenda.
Weighing in on the fact that the US and G7 allies were entering the final stretch of talks on setting a price cap on Russian oil exports, Yellen added:
“Holding down prices is something that’s particularly helpful to developing countries that are suffering from high energy prices.”
Russian officials have warned repeatedly that any attempts to "cap" the price of Russian oil may lead to a halt in exports, as Russia accounts for approximately 10 percent of the global crude oil market.
Russian oil pump jack. File photo. - Sputnik International, 1920, 09.10.2022
Economy
Kremlin: OPEC+ Decision to Cut Oil Production is a 'Victory of Common Sense'
The US Treasury Secretary stopped short of revealing any potential countermeasures the US might deploy in response to the OPEC move.
“The president has been focused for a lot of time on exploring all available options to try to bring [oil prices] down,” she added, after White House officials said they would launch consultations with Congress about possible reactions to the cut in output.
OPEC+ took the decision at their first face-to-face gathering in Vienna since 2020 despite a flurry of last-ditch diplomacy by US and EU officials to Saudi Arabia in recent weeks. To try to convince the country’s crown prince and new Prime Minister Mohammed bin Salman to boost oil production amid a global energy crisis sparked by the US' and its allies' anti-Russian policies.
OPEC+ member-states' meeting, 6 December 2019. - Sputnik International, 1920, 07.10.2022
Americas
US Reviewing 'Number of Response Options' Against Saudi Arabia Over OPEC+ Cuts - Blinken
Joe Biden himself walked away empty-handed after a trip to Saudi Arabia in July, with the Saudis only promising to “consult” with the US on oil issues.
The White House immediately condemned the fresh decision on oil cuts by OPEC+ as "shortsighted". It also announced a 10Mln barrel release from the US Strategic Petroleum Reserve, amid earlier reports by The Wall Street Journal that the US has been drawing crude from the SPR at such a rapid pace this year that it is running out of its oil buffer. Biden is also considering loosening sanctions on Venezuela to allow energy company Chevron to start pumping oil there, US media reported in the wake of the OPEC+ decision.
Meanwhile, oil prices jumped double-digits, with benchmark Brent crude nearing $100 a barrel after the announced output cut rejuvenated a market marred by four straight months of losses.
The "responsible position" taken by the oil cartel was hailed by Russia as serving to balance out the "chaos" on global energy markets unleashed by the United States, Kremlin spokesman Dmitry Peskov said earlier.

"Of course, the fact that [the Russian] president was able to establish mutually respectful relations [with Saudi Arabia and the UAE] which are based on mutual benefit, based on mutual trust - this of course helps in discussing the most critical details. I am not inclined to say that this is some kind of victory on our part. This is a victory of common sense," Peskov said in an interview with Russian television on 9 October.

A person pumps gas at a Shell gas station on April 01, 2022 in Houston, Texas - Sputnik International, 1920, 18.07.2022
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