WASHINGTON: The White House has shrugged off the recent announcement by Saudi-led OPEC+ oil producers of a sharp cut in oil output, stating that it was inadvisable but will have a limited impact on the US economy.
National Security Council spokesman, John Kirby, said that production cuts were not advisable given market uncertainty, but the US was focused on moving ahead. He noted that the situation had improved since production cuts a year ago, which had angered the Biden administration.
Kirby said that crude prices were around $80 a barrel, compared to $120 a year ago, and the US was focused on prices.
A group of OPEC+ countries, led by longtime close US ally Saudi Arabia, announced a surprise cut of one million barrels a day in a bid to boost prices. Russia, which is also part of OPEC+, said it was extending a previously announced unilateral cut of 500,000 barrels a day.
Kirby said that the latest production cuts were not a complete surprise to the US government as they were given a heads-up.
US troubled relationship with Saudi Arabia
When asked about the troubled relationship with Saudi Arabia, Kirby said the country “is still a strategic partner,” but “we don’t always see eye to eye on everything.”
The announcement of production cuts comes at a time when the entire world is still grappling with the COVID-19 pandemic, which has had a significant impact on global oil demand.
The decision by OPEC+ to cut output has caused concern in some quarters that it may lead to a spike in oil prices, which could hamper the global economic recovery.
However, Kirby said that Saudi Arabia is still a strategic partner, despite the differences between the two countries.
The US has dismissed the recent announcement by Saudi-led OPEC+ oil producers of a sharp cut in oil output as having a limited impact on the US economy. While acknowledging that the US and Saudi Arabia do not always see eye to eye, Kirby noted that the country remains a strategic partner.
The move by OPEC+ has raised concerns about the global economic recovery and the fragile relationship between the US and Saudi Arabia.
