The Biden administration is turning to Venezuela for help after accusing OPEC+ of siding with Russia in its decision to make the largest cut in oil production since the beginning of the COVID-19 pandemic.
The U.S. has proposed a deal that would unfreeze hundreds of millions of dollars of Venezuelan state funds held up in American banks. In exchange, the socialist dictatorship will allow Chevron to produce oil on its lands, the Wall Street Journal reported, citing sources familiar with the agreement.
On Wednesday, OPEC agreed to cut oil production by 2 million barrels a day, prompting the accusation from the White House.
“Look, its clear that OPEC+ is aligning with Russia with today’s announcement,” White House press secretary Karine Jean-Pierre told reporters aboard Air Force One.
The White House said that in response, President Biden would release an additional 10 million barrels of oil from the United States Strategic Oil Reserve in November in an effort to stem price hikes.
However, more than a quarter of the stock already has been released, draining the reserves to the lowest level since 1984. And some experts have warned the depletion weakens American energy security while having only a marginal effect on prices at the pump.
OPEC’s cut in oil production is designed to raise crude prices. The Brent crude oil benchmark was $93 a barrel Wednesday, down from $120 a barrel in March. The OPEC ministers said the cuts were necessary “in light of the uncertainty that surrounds the global economy and oil market outlooks.”
Jean-Pierre, at the White House Wednesday, emphasized that “with the Inflation Reduction Act, we are making a historic investment in accelerating the transition to clean energy.”
CNN reported the Biden administration “launched a full-scale pressure campaign in a last-ditch effort” to persuade Middle Eastern allies not to cut production.
The network noted that the cut “likely cause US gasoline prices to rise at a precarious time for the Biden administration, just five weeks before the midterm elections.”
After a visit to Saudi Arabia in August, which included a fist-bump with crown prince Mohammed bin Salman, OPEC+ agreed to only a small increase in oil production.
A New York Times analysis Wednesday said the move Wednesday by OPEC+ “exposes the failure of [Biden’s] fist-bump diplomacy over the summer with the crown prince of Saudi Arabia,” while undercutting his effort to stem gas prices ahead of the midterm elections and setting back his effort to curb Russia’s oil revenue.
“In both optics and substance,” wrote David E. Sanger and Ben Hubbard, “the move by OPEC and its allied oil producers underscored the challenges the United States faces in managing its foreign and economic policy at a time when the global economy is at risk of recession, and energy politics has emerged as a key component of the conflict in Ukraine.”
