Ann Vandersteel, co-chair of the Zelenko Freedom Foundation (ZFF), said the supply cut announced by the Organization of the Petroleum Exporting Countries (OPEC) was a political statement.
She made this claim during the Oct. 6 episode of “The Zelenko Report” on Brighteon.TV. A day before the episode aired, OPEC and its allies – under the OPEC+ banner – agreed to slash oil production by two million barrels per day (bpd).
The output reduction, set to begin in November 2022, was put in place to spur a recovery in crude prices. The move did not surprise energy market participants, which had been expecting OPEC+ to reduce oil output between 500,000 and two million bpd. It was, however, a nasty surprise for the U.S. as it was calling on oil giant Saudi Arabia to pump more oil.
OPEC+ had slashed its output by a record 10 million bpd in early 2020, during the early days of the pandemic. The oil cartel has since undone those supply cuts, though some member countries are still struggling to catch up.
Vandersteel quickly pointed to President Joe Biden’s bad decisions for the supply cut and impending increase in pump prices. She zeroed in on edicts by the incumbent chief executive that crippled America’s energy independence.
“Remember, by the way, folks, when it wasn’t that long ago when the U.S. was actually an oil exporter and a natural gas exporter, and our price for gasoline was actually under $2.50 per gallon?”
As per reports, Biden was “disappointed” by the OPEC+ supply cut. The president had been pressuring the group – Saudi Arabia in particular – to increase supply to drive down prices ahead of the November midterm elections.
When Russia invaded Ukraine in February, the price of crude soared to over $100 per barrel. This worried markets that global sanctions could lead to a shortage of Russian oil, potentially leading to European nations having their oil supplies significantly squeezed. Lithuania and Finland, for instance, imported about 80 percent of their oil from Russia in November last year.
In a statement, Biden said he directed the Department of Energy to release another 10 million barrels from the Strategic Petroleum Reserve following the OPEC+ decision. The administration will also consult with Congress regarding additional tools and authorities to reduce the cartel’s control over energy prices, it added. (Related: Price of crude oil shoots above $120 per barrel during short squeeze; experts warn of even higher oil prices in coming months.)
Moreover, the statement added that the OPEC+ announcement served as a reminder of why it is critical that the U.S. reduce its reliance on foreign sources of fossil fuels. This, in essence, implied that the cartel is now aligning with Russia.
“Even if it were based on technical reasons and purely supply and demand, that is not how it’s being interpreted by the United States. The perception is 90 percent of the law, and the perception is the Saudis are not holding up their end of the bargain,” said Michael Stephens of the London-based think tank Royal United Services Institute.
“The era we’re in clearly shows that even if the Saudis coordinate with Russia on oil prices, that is going to be viewed as overt support for Russia.”
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