Oil: White House slams OPEC+ quota cut

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Oil: White House blasts OPEC+ quota cut

Over the course of its meetings, OPEC+ is resisting Western demands to produce more in order to contain the surge in prices.

OPEC+ on Wednesday decided on a drastic cut in oil production quotas to support prices, immediately drawing the wrath of the White House, which accused the cartel of “s' align” with Moscow.

Joe Biden said he was disappointed with the short-sighted decision, announcing an upcoming congressional consultation on additional tools and mechanisms to reduce scrutiny from the group of producers in the energy market.

The American president has been struggling for months to try to stem the soaring prices that are eroding household purchasing power, even going so far as to visit Riyadh in July in a highly controversial visit.

Aboard the Air Force One plane, White House spokeswoman Karine Jean-Pierre hammered the nail. It is clear that with its decision, the alliance is aligning itself with Russia, she said. This is an error.

Returning to Vienna for the first time since March 2020, the thirteen members of the Organization of the Petroleum Exporting Countries (OPEC) led by Saudi Arabia and their ten partners led by Russia wanted to mark the occasion , after long months in videoconference due to anti-COVID restrictions.

After a brief meeting, they agreed to a reduction of two million barrels per day for the month of November, according to a press release from the alliance.

The cut, the largest since the start of the pandemic, will likely boost prices as consumers breathed a sigh of relief after pump prices have fallen sharply since this summer, said Oanda's Craig Erlam. .

The former minister responsible for oil exploitation Thamer Ghadban and the current secretary general of OPEC, the Kuwaiti Haitham al-Ghais.

The two world benchmarks for crude have lost ground in recent weeks, far from the highs recorded in March at the start of the war in Ukraine (nearly $140 a barrel).

After the announcement, prices rose by about 2%, to $93.43 a barrel of Brent North Sea, and $87.86 a barrel of West Texas Intermediate (WTI), its American equivalent.

Faced with criticism at a press conference on the impact for consumers, Saudi Energy Minister Abdel Aziz bin Salman advanced the various uncertainties hovering over the global economy. On several occasions, he insisted on the need to be proactive in order to stabilize the market.

Bruno Jean-Richard Itoua, Congolese Minister of Hydrocarbons, also defended the desire of the group of producers to fight against volatility, fueled by speculation.

This decision suits Moscow, which will be able to fill its coffers, as a European embargo on imports of Russian oil is due to come into force in early December.

“There is a reason why Russia is in favor of this cut: it is not sure of finding buyers for its oil. »

— Patrick Pouyanné, CEO of TotalEnergies

The Russian Deputy Prime Minister in charge of Energy, Alexandre Novak, also attacked this on Wednesday to the policy of European sanctions.

He castigated any cap on the price of Russian crude, a measure envisaged by the EU, which would violate market mechanisms and could have an adverse effect. very harmful on the global industry.

Referring to possible shortages, he again warned that Russian companies would not supply oil to countries that use this instrument, according to comments made on Russian television.

Created in 1960 with the aim of regulating the production and price of crude oil by establishing quotas, OPEC was extended in 2006 to Russia and to #x27;other partners to form OPEC+.

In a historic gesture, the members of the alliance had decided in the spring of 2020 on cuts of nearly 10 million barrels per day in the face of the collapse in demand linked to the COVID-19 pandemic.

A declaration had then been signed, which OPEC + decided on Wednesday to extend until the end of 2023, a sign of the cohesion of the alliance vaunted by the Saudi prince, which has not been shaken by the war in Ukraine.

The next meeting is scheduled for December 4, before returning to a semi-annual rhythm as before the pandemic.

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