The United States has been appealing to Saudi Arabia to postpone oil cuts from the Organization of the Petroleum Exporting Countries (OPEC).
Key Details
- The U.S. reportedly asked for a month delay to an announced 2 million barrel cut from OPEC, which might be related to the upcoming midterm election on November 8 as the delayed rise in gas prices wouldn’t hit markets until after the election.
- “Days before a major oil-production cut by OPEC and its Russia-led allies, U.S. officials called their counterparts in Saudi Arabia and other big Gulf producers with an urgent appeal—delaying the decision for another month,” says The Wall Street Journal.
- “Saudi Arabia said Thursday that the U.S. had urged it to postpone a decision by OPEC and its allies—including Russia—to cut oil production by a month. Such a delay could have helped reduce the risk of a spike in gas prices ahead of the U.S. midterm elections next month,” says AP.
- OPEC did not change its mind and affirmed the oil cuts on October 5.
- President Joe Biden promised retaliation against OPEC, saying “when the House and Senate gets back, they’re going to have to—there’s going to be some consequences for what they’ve done, with Russia.”
Why it’s news
The administration has pushed back against the allegation that the delay is tied to the election, saying the delay was made with respect to the ongoing war in Russia to bolster the U.S. economy.
It is possible though that the requested delay could’ve offset rising gas prices just long enough to get through the election.
“Saudi officials dismissed the requests, which they viewed as a political gambit by the Biden administration to avoid bad news ahead of the U.S. midterm elections, on which control of Congress hangs. High gas prices and inflation have been central issues in the campaign,” says The Wall Street Journal.
Backing up a bit
As we previously reported, President Joe Biden is continuing to release gas from the Strategic Petroleum Reserve through the end of the year, releasing 10 million additional barrels in November.
The release of 10 million barrels will coincide with the midterm elections in November, a move that is believed was done to ease economic tensions before voters pull the lever for their preferred candidates.
“Rising oil prices—and by extension higher gasoline prices—have been a key driver of inflation in the U.S. and around the world, worsening global economic woes as Russia’s months-long war on Ukraine also has disrupted global food supplies. For Biden, gasoline prices creeping up could affect voters,” says AP.
