The White House is trying to prevent a major production cut in OPEC+, just a month prior to the midterm elections. This is when the current administration needs lower prices at the pump.
A CNN report states that all human resources have been mobilized by the administration, with the White House “having an epiphany and panicking,” according to one unnamed official.
According to OPEC+’s latest reports, the extended cartel may consider a production cut of as much as 2 million barrels per day. This would be the largest production cut since the first pandemic when demand was destroyed by lockdowns.
“It is difficult to overstate the anxiety the Biden administration has about a possible resurgence of oil prices,” Bob McNally of Rapidan Energy told Bloomberg before the OPEC+ meeting which takes place in Vienna later today.
“A large OPEC+ reduction would be antagonizing for the White House, though officials may wait until prices respond before pulling the trigger on any policy responses.”
CNN reports that talking points drafted by the White House in a time of urgency had suggested that the OPEC+ production cuts are viewed as “a hostile action”.
Amos Hochstein and Janet Yellen were tasked with arguing for no cuts with Gulf countries. CNN reported that the talking points of the Treasury Secretary would be focused on the potential reputational damage to the West by the Gulf OPEC member that supports the cut.
CNN quoted a draft of talking points as saying that “there is a great political risk to your reputation and relations with America and the West if you proceed.”
However, the main argument being made in lobbying is about the negative effect that tighter oil supplies would have on the current global economy.
