The OPEC+ alliance of oil-exporting countries left its targets for global oil production in place Sunday in its first meeting since announcing cuts in October, as the Biden Administration reportedly backs off its earlier threats to punish Saudi Arabia—a leader of the 23-member bloc—after fears of an OPEC-driven spike in oil prices subsided.
Following its meeting Sunday, OPEC+ announced it would hold current oil production projections, citing uncertainty as the European Union prepares to ban many Russian oil imports and several countries plan to cap the price of Russian oil, two measures that are set to take effect Monday as punishment for Russia’s invasion of Ukraine.
Meanwhile, the Biden Administration is no longer pursuing retaliatory measures against Saudi Arabia for initially slashing oil production in October, NBC reported Saturday, as the cuts have defied expectations that they may raise U.S. gas prices, which have plummeted since reaching an all-time high in June.
The Biden Administration threatened “consequences” against Saudi Arabia in Octobre following OPEC+’s decision to curb oil production by 2 million barrels a day beginning in November. White House officials initially criticized the move as one that aligned with Russian interests and was intended to embarrass the Biden Administration ahead of the midterm election by causing gas prices to increase. But the administration has since softened its stance, telling NBC that it “will continue to assess relations with Saudi Arabia methodically and strategically, and in line with what’s in our interests.”
OPEC+ on Sunday defended its October decision to slash production in a statement that said the move was “purely driven by market considerations and recognized in retrospect by the market participants to have been the necessary and the right course of action towards stabilizing global oil markets,” referring to falling oil prices.
What To Watch For
The Group of Seven—a coalition of wealthy countries—plans to cap the price of Russian oil at $60 per barrel. In an effort to mitigate the negative effects of this price cap, Russian officials said Sunday Moscow would not sell oil to countries that impose the limits.