The United States is pushing hard to persuade the Organization of the Petroleum Exporting Countries and its partners, OPEC+, to prevent the latter from making a decision to slash output at today’s meeting, people familiar with the matter said.
A number of foreign media have previously reported that OPEC+ is considering a decision to cut production by 1-2 million barrels per day at its meeting on Wednesday (5th), in order to raise oil prices, but for the United States, this move may lead to a recovery in gasoline prices and aggravate the spread of swelled, and cast a shadow over Biden’s midterm elections.
Archyde.com quoted people familiar with the matter as saying that the Biden administration is making clear to OPEC+ countries that the current economic fundamentals do not support production cuts. Reach out to Central ASEAN countries such as Kuwait, Saudi Arabia and the United Arab Emirates in an attempt to persuade them to vote once morest production cuts at the meeting.
CNN reported that as the White House is increasingly concerned regarding potential production cuts, lobbying activities have become wider, in addition to energy and national security officials, White House economic and foreign policy officials have also joined the lobbying ranks, and the White House has also asked Treasury Secretary Ye Janet Yellen has personally explained to officials in the Persian Gulf countries how production cuts will hurt the global economy and put OPEC countries and the United States at great political risk in their relationship.
The U.S. sees the prospect of production cuts as “a total disaster,” according to a White House talking-point document distributed to the Treasury Department, warning that cuts might be seen as a hostile act.
The United States pointed out that in the long run, the production cut may cause more downward pressure on prices, but it is contrary to the purpose of the sharp production reduction. Their view is that cutting production now will increase the risk of inflation, which in turn will push up interest rates and ultimately a greater risk of recession.
Adrienne Watson, spokeswoman for the National Security Council (NSC), said she would not comment on any OPEC move until it did, reiterating that energy supply should meet demand to support economic growth and help global consumers drive down energy The U.S. side will continue to discuss this point with its allies.
