On Oct. 5, OPEC+, an international group comprising the world’s biggest oil producers, agreed to a significant cut in oil production in order to raise prices. Though the Biden administration launched an aggressive last-ditch campaign in order to dissuade the mostly Middle Eastern giants from carrying out that decision, those efforts ultimately failed. Now, according to Bloomberg, the White House is planning to announce additional sales of oil reserves in order to counter impending market pressure.
The announced cut in oil output was even larger than the White House feared–production will go down by 2 million barrels a day starting in November. OPEC+ claims that the cuts were necessary “in light of the uncertainty that surrounds the global economy and oil market outlooks.” Of course, American gas prices are likely to soar back up, as a result, an ongoing problem that Biden addressed at an LA event last week.
“The price of gas is still too high, and we need to keep working to bring it down,” Biden said at the event, adding that he planned to announce additional actions in the days to come.
Per Bloomberg, President Joe Biden is also soon likely to announce the additional sale of 14 million barrels of oil from the Strategic Petroleum Reserve as the US seeks to hold off rising gas prices and balance the market. This move would also fulfill the administration’s announcement in March to release a historic 180 million barrels from the SPR over six months to combat soaring energy prices triggered by Russia’s invasion of Ukraine. This helped drive down gas prices for nearly months straight. But with the OPEC+’s decision happening just weeks away from the November midterm elections, the Biden administration will have to contend with selling more barrels than intended while dealing with potential pushback against Democrats.
While there’s no telling how the elections will fare yet, in light of this news, the administration will be looking at all options to keep gas prices from surging further.
