Monday, 29 May, 2023

US shrugs off Saudi-led oil production cut

WASHINGTON: President Joe Biden on Monday shrugged off a sharp output cut by Saudi-led OPEC+ oil producers, while the White House criticized the move but said it would be of limited impact on the US economy.

"It's not going to be as bad as you think," Biden told reporters while traveling in Minnesota to promote his economic record.

White House National Security Council spokesman John Kirby told reporters "we don't think that production cuts are advisable at this moment, given market uncertainty."

The United States "made that clear," he said, but added: "we're focused on moving ahead here."

A group of OPEC+ countries, led by longtime close US ally Saudi Arabia, announced a surprise cut of one million barrels a day in a bid to boost prices, reports AFP.

Russia, which is also part of OPEC+, said it was extending a previously announced unilateral cut of 500,000 barrels a day.

Kirby said the situation had improved since production cuts a year ago that angered the Biden administration, which was struggling at the time to stem a politically sensitive surge in fuel prices across the United States.

"We're also just in a different place in the market than we were last year," he said, noting that crude prices are at around $80 a barrel, compared to as much as $120 one year ago.

"We're focused on prices," he said.

Asked about the troubled relationship with Saudi Arabia, Kirby said the country "is still a strategic partner" but "we don't always see eye to eye on everything."

Kirby said that the latest production cuts were not sprung as a complete surprise to the US government. "We were given a heads up."