(Bloomberg) -- The White House expressed frustration with plans by OPEC+ to cut output targets by 2 million barrels a day, announcing steps to curb its impact on energy prices and threatening repercussions for the oil cartel.
OPEC+ agreed Wednesday to the cut as it seeks to halt a slide in oil prices caused by the weakening global economy -- the biggest reduction by the Organization of Petroleum Exporting Countries and its allies since 2020.
The move was a blow to President Joe Biden, who visited Saudi Arabia in July in search of higher production and lower pump prices for Americans -- and it risks adding another shock to the global economy as Russia threatens to tighten energy supplies this winter.
“It’s clear that OPEC+ is aligning with Russia with today’s announcement,” White House press secretary Karine Jean-Pierre told reporters aboard Air Force One en route to Florida.
Read more: OPEC+ Tries to Keep Oil Above $90 With Large Production Cut
White House National Security Adviser Jake Sullivan and National Economic Council Director Brian Deese hinted in a statement at the potential for further releases from the Strategic Petroleum Reserve, citing a previously announced release of 10 million barrels to the market next month. “The President will continue to direct SPR releases as appropriate,” the statement said.
Just a day earlier, Jean-Pierre said they “were not going to be considering new releases at this time.”
And Sullivan and Deese opened the door to legislation the White House previously expressed concerns over that would seek to rein in the oil cartel’s power. The administration would “consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices,” the two said.
Lawmakers seizing on higher gasoline and oil prices have revived long-standing legislation that would allow the US government to sue members of OPEC for manipulating the energy market.
The bill, dubbed the “No Oil Producing and Exporting Cartels Act,” or “NOPEC,” has been introduced many times over the past two decades, to no avail, but has new momentum as high pump prices continue to stoke red-hot inflation, a political liability for Biden and Democrats ahead of the November midterm elections.
Why ‘NOPEC’ Keeps Arising as a U.S. Answer to OPEC: QuickTake
Biden called the cuts “unnecessary” as he left the White House to tour hurricane-ravaged areas of Florida, according to CNN.
Senator Chris Murphy of Connecticut, often a proxy for the White House, assailed the OPEC decision, pointing to Biden’s efforts to court the Saudis to help keep down oil prices.
“I thought the whole point of selling arms to the Gulf States despite their human rights abuses, nonsensical Yemen War, working against US interests in Libya, Sudan etc, was that when an international crisis came, the Gulf could choose America over Russia/China,” Murphy said in a tweet.
Republican Representative Cathy McMorris Rodgers of Washington renewed her criticism of Biden’s energy policies, which she blamed for higher prices.
“I am warning this administration to not use this as an excuse to ban American exports or further their radical energy transition. Doubling down on failed policies will only further harm our energy security and lead to more record-high prices across our entire economy,” McMorris Rodgers, the top Energy and Commerce Committee Republican, said in a statement.
White House officials have asked the Energy Department to analyze the possible impacts of a ban on exports of gasoline, diesel and other refined petroleum products, an indication that the controversial idea is gaining traction in some parts of the Biden administration.
Read more: White House Takes Closer Look at Gasoline Export Ban Option
OPEC’s move will have a smaller impact on global supply than the headline number of 2 million barrels a day suggests. Several member countries are already pumping well below their quotas, meaning they would already be in compliance with their new limits without having to reduce production.
Still, earlier Wednesday, US officials were making calls to counterparts in the Gulf trying to push back against the move to cut production, according to people familiar with the situation.
“We’ve made clear our views to OPEC members,” Secretary of State Antony Blinken said Wednesday. “What we’ve been clear about is the need for energy supply to meet demand. That’s what we’ve been working on across the board. And we’ve done our part.”
Blinken downplayed Biden’s trip to Saudi Arabia in relation to the decision. He said the US has “a multiplicity of interests with regard to Saudi Arabia,” including continuing a truce between the Kingdom and Yemen.
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