The Biden administration has deemed the sudden cuts in oil production announced by Saudi Arabia and other OPEC+ countries on Sunday as unreasonable. A spokesperson for the National Security Council stated, "We do not believe these cuts are justified at this time given the uncertainty surrounding the market, and we have made this clear."
The additional cuts of 1.16 million barrels per day aim to support market stability, with analysts believing they will help raise crude oil prices from their lowest levels in 15 months, which were reached in mid-March. Producers had already implemented an agreement earlier to reduce production by two million barrels per day until the end of this year.
The spokesperson added, "We focus on prices for American consumers, not barrels, and prices have fallen significantly since last year, by more than $1.50 per gallon from their peak last summer." They continued, "We will continue to work with all producers and consumers to ensure that energy markets support economic growth and lower prices for American consumers."
According to the American Automobile Association (AAA), the average gasoline price across the U.S. was about $3.50 per gallon on Sunday. This represents a 30% decrease from the peak in June when it exceeded $5 per gallon. OPEC+ had decided in October to reduce production by approximately two million barrels per day, and expectations indicated that the alliance would maintain this level in its scheduled meeting tomorrow.
Oil prices fell to their lowest point in about 15 months in March due to turmoil in the banking sector. Although prices have relatively recovered over the past week, Brent crude remains below $80 per barrel.
