(Bloomberg) -- The US was given a “heads up” about the surprise OPEC+ announcement to slash oil production by more than 1 million barrels per day as officials in Washington sought to strike a balance between denouncing the move and not further souring relations with Saudi Arabia.
The Biden administration does not believe “that production cuts are advisable at this moment given the market uncertainty,” National Security Council spokesman John Kirby (NYSE:KEX) told reporters on Monday.
But at the same time, the White House said the announced cuts occurred in a “different environment” from the production cut last October that prompted the President Joe Biden to vow “consequences for Saudi Arabia.” Kirby noted that crude oil prices had fallen significantly, and said the decision was made by the entirety of the OPEC+ cartel – suggesting the US did not hold the Saudis solely responsible.
The tone was markedly different from the posture the administration took last fall after OPEC+ cut production by 2 million barrels per day.
Critics suggested in the fall that Biden was particularly upset by the previous cuts since they came shortly before November’s midterm elections, with Democrats fearful that voters would punish them over historic inflation driven in part by gas prices. Biden had also visited Saudi Arabia earlier in the summer and met with Crown Prince Mohammed bin Salman, despite previously vowing to make the Saudi leader a “pariah” over the killing of columnist Jamal Khashoggi.
Still, while the White House said they were given advanced warning of the latest production cut, Kirby said the US did not know what prompted the decision.
“I can’t even begin to speculate why this decision was made,” Kirby said. “We don’t know. And I’m not going to try to guess.”
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