US has ‘limited options’ to respond to OPEC+ oil cut as midterms approach
The Organization of the Petroleum Exporting Countries (OPEC) and its non-OPEC allies’ plan to cut oil output was seen as a “slap in the face” for the Biden administration which has struggled to respond with very limited options.
Chinese analysts said none of Washington’s options would achieve its purpose, but more importantly, the OPEC+ cut is symbolic as more nations are not succumbing to US pressure over issues such as the Russia-Ukraine conflict.
After expressing disappointment on Thursday, US President Joe Biden said the US was looking at all possible alternatives to keep prices from rising, Reuters reported.
Some of Biden’s options include releasing more oil from the Strategic Petroleum Reserve or exploring a curb on energy exports by US companies. US Secretary of State Antony Blinken said on Thursday that the US is reviewing various options regarding its relationship with Saudi Arabia, according to Reuters.
The OPEC+ announced its plans to cut oil production by two million barrels a day from November, as CNN said the cut is the largest since the beginning of the pandemic and could “lead to a dramatic spike in oil prices.” The White House is “having a spasm and panicking,” CNN quoted a US official as saying. l
He Weiwen, a senior fellow of the Chongyang Institute for Financial Studies at the Renmin University of China and former economic and commercial counselor at Chinese Consulates General in San Francisco and New York, said that Biden can hardly do anything effective to respond to the gas price spike.
The US has already released much of its Strategic Petroleum Reserve, and releasing the rest of it simply will not temper the price. Instead, soaring oil prices will wound Biden, who has been struggling to deal with high domestic inflation and the midterm elections, analysts said.
He said the OPEC+ cut plan annoyed Biden not just because of its domestic crisis, but also because US believes OPEC nations are helping Russia to profit from rising oil prices and mitigate sanctions imposed by the West.