More alarm bells for Biden as OPEC cuts oil production by 2 MILLION barrels a day

US drivers could face another surge in gas prices as the OPEC+ alliance has announced it will cut oil production by up to two million barrels per day, which could be a huge setback for the Biden administration.

Energy ministers of the OPEC cartel, of which Saudi Arabia is the leading member, and allied non-members, including Russia, will meet in person for the first time since early 2020 at the group’s headquarters in Vienna.

The production cut announced on Tuesday is the largest since the start of the COVID-19 pandemic.

It comes after barrel prices fell by about a quarter in just three months, now around $90, amid fears of an impending global recession.

The effect of the announcement on the pumps is not yet certain, but the decision as the Biden administration scrambled to avert a “total disaster” according to a CNN report.

OPEC’s decision after their Wednesday meeting could send pump prices rising again after the White House celebrated their record-breaking fall this summer. They have already started backing up in the past few weeks.

But a sudden spike would be a particularly worrisome setback with the November midterm elections just over a month away.

An official told CNN the White House is “cramping and panicking” about the potential outcome.

Senior economic and foreign policy officials have reportedly lobbied allies in the Middle East to vote against production cuts.

DailyMail.com has reached out to the White House National Security Council for comment.

John Kirby, the National Security Council’s strategic communications coordinator, downplayed the impact of the cut during a Fox News interview Wednesday morning.

‘[T]hey adjust their numbers a bit here. OPEC plus has said and told that they are producing 3.5 million barrels more than they actually are,” Kirby said.

“So in some ways this announced drop is actually bringing them back in line with actual production.”

He added that there were no “dramatic shifts in oil prices,” noting that Wednesday’s prices remain in the low ’90s.

Press Secretary Karine Jean-Pierre was pressured on Tuesday over the White House’s previous rounds of victory over falling gas prices, which has translated into relative silence as they creep back up.

“You said the president was responsible for the drop in gas prices. Is the president responsible for rising gas prices?’ asked Fox News reporter Peter Doocy during Jean-Pierre’s regular press conference.

She replied, “So it’s much more nuanced than that.”

Jean-Pierre pointed out that gas prices have risen around the world and attributed the spikes to “the” [COVID-19] pandemic and Putin’s war’ in Ukraine.

“We understand there is more work to be done, we never said we’re done here,” the Biden official said.

“But we’ve seen, the reality is we’ve seen the fastest drop in gasoline prices in more than a decade. It’s because of what this president has done.”

A production cut could benefit Russia by setting higher prices ahead of a European Union ban on most Russian oil imports, a sanction on Ukraine’s invasion that comes into effect at the end of the year, analysts say at Commerzbank.

Oil prices rose this summer as markets worried about the loss of Russian supplies due to sanctions over the war in Ukraine, but fell as fears of recessions in major economies and China’s COVID-19 restrictions on demand for oil fell. weighed crude oil.

It’s unclear how much of an impact a production cut would have on oil prices – and thus gasoline prices – as members are already unable to meet quotas set by OPEC+.

Still, Saudi Arabia may be unwilling to undermine its relationship with Russia, even as the world’s largest oil exporter has reservations about austerity measures and recently drew Biden leaders to German Chancellor Olaf Scholz to discuss energy supplies.

The US president’s meeting with Saudi Arabian Crown Prince Mohammed Bin Salman sparked anger in Republicans at home.

GOP lawmakers accused Biden of ‘begging’ for oil from known human rights abuser as they hammered him for failing to expand

Commerzbank’s analysts said a small cut would likely push the price of oil further, while the group would need to take at least 500,000 barrels a day off the market to raise prices.

Such a production cut “would undoubtedly signal to the market the determination and determination of the cartel to support oil prices,” said UniCredit economist Edoardo Campanella. But the supply would fall less than announced.

“If the group cut target production by 1 million barrels per day, actual production would likely fall by about 550,000 barrels per day – as countries like Russia or Nigeria that produce below quota would see their formal target drop, but above what they can currently stay. produce,” said Campanella.

At its last meeting in September, the group cut the amount of oil it produces by 100,000 barrels per day in October. That symbolic cut didn’t do much to push up lower oil prices, but it informed markets that OPEC+ was ready to intervene if prices continued to fall.