[Text/Observer Network Qi Qian] In recent times, the Biden administration has been urging Gulf countries to increase oil production to lower oil prices and alleviate the global energy crisis. The "major production cut plan" announced by OPEC+ on October 5 really caught Biden and his wife off guard. The White House said it was "disappointed" and hinted that it would be possible to further release oil reserves.
More than US media regard OPEC+'s move as a major blow to Biden. As the midterm election approaches, high oil prices will undoubtedly make Biden and the Democratic Party pay a political price.
US " New York Times " said that OPEC+'s decision to cut production is a signal that Biden's influence on Gulf countries is much lower than he expected. Some political analysts believe that given the imminent U.S. midterm elections, the move is a "direct blow" to Biden.
Screenshot of US media reports
On October 5th local time, OPEC+ held the 33rd ministerial meeting in Vienna, agreeing to cut production by 2 million barrels per day from November. This is the largest oil production cut since the epidemic, equivalent to about 2% of global oil demand.
reported that the move could lead to a sharp surge in oil prices, putting further pressure on Western consumers plagued by high energy costs, and also helping Russia enrich its treasury during its "special military activities." At the same time, the energy industry has been in turmoil since the intensification of the Russian-Ukrainian conflict, with oil prices soaring, and the US energy market has also been affected. Today, record-breaking high oil prices and high inflation in the United States have affected Biden's election situation.
The New York Times said that the degree of anger and surprise in the White House was obvious. On October 4, White House Press Secretary Jean-Pierre said that the Biden administration "will not consider" releasing oil reserves; but after the news of OPEC+ production cuts came out, White House National Security Advisor Sullivan and National Economic Commission Director Diss announced in a statement on the 5th that Biden will "continue to guide the release of strategic reserves as appropriate."
The New York Times believes that OPEC+'s decision has greatly weakened Biden's efforts to avoid rising oil prices before the midterm elections, and hindered his efforts to limit Russian oil revenues. This also exposed the failure of Biden and the Crown Prince of Saudi Arabia (Fist-bump diplomacy).
In order to convince Saudi Arabia to increase production, in July this year, Biden lowered his figure and visited Saudi Arabia and even met with the Saudi crown prince. US intelligence agency investigation found that the Saudi crown prince was related to the case of "dismemberment" murder of reporter Khashoggi in 2018, and Biden once publicly called Saudi Arabia a "untouchable state." However, Saudi Arabia has always been "ignoring" the Biden administration, which has both soft and hard work, and is committed to strengthening relations with international partners such as China and Russia.
The New York Times quoted experts as saying that OPEC+ production cuts will have a great impact on global oil prices, with gasoline expected to rise by 15 to 30 cents per gallon, and also put the United States' efforts to limit Russian oil revenues in danger. And this could not be the worst time for Biden, because the midterm elections are now only one month away.
"This once again shows that OPEC+ is still acting for its own interests and maintaining oil revenue is far more important for its member states than for Russia to pay for the ‘invasion’ Ukraine.'" The New York Times commented.
OPEC+representatives of member states held a press conference, a report from foreign media
Foreign Policy reported on the 5th also stated that the Organization of Petroleum Exporting Countries will cut oil production, which will hit Biden.
The report believes that despite the protests raised by the White House, the reasons for cutting oil production are not political. Instead, there is concern that the global economic recession will severely reduce global oil demand. Last week, Goldman Sachs lowered its forecast for 2023 oil prices to $108 from an earlier $125 a barrel, due to a sluggish global oil demand. "However, this decision is a blow to the Biden-led White House. The White House has shown goodwill to Saudi Arabia and other Gulf countries this year to ensure adequate oil supply."”
" Forbes " is very direct, and the title of the report on the 5th said "OPEC scoffs at Biden".
But this report tells a fact: "I tell people that to understand OPEC , you have to think from their standpoint. Their goal is to maximize the value of underground oil. This goal is directly contrary to the desire of most American politicians and consumers, whose desire is to obtain cheap gasoline. ”
There are different interpretations of the reasons why OPEC+ decided to cut production.
“This is definitely a political (decision), it has nothing to do with money,” Cinzia Bianco, a researcher at the Gulf region of the European Foreign Relations Commission, speculated that after Biden visited Saudi Arabia, the Saudis were disappointed with what they got from the United States, so they took a strategic move of "political significance".
Karen Young, a senior research scholar at the Center for Global Energy Policy at Columbia University in the United States, believes that this is Saudi Arabia’s “power move” and shows that oil is still important and that they “have the ability to influence the market.”
Saudi analysts refuted this statement, insisting that the production cuts were purely for technical reasons.
Saudi analyst Shehabi (Ali) Shihabi said: "This is certainly not a hostile, anti-Biden act. This has nothing to do with Biden, and is a decision to keep the price within an acceptable range. "He added that oil is crucial to the Saudi economy and is "the lifeline and economic lifeline of the kingdom", so much so that ensuring that oil is still profitable and surpassing other concerns.
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