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Saudi Arabia defends OPEC+ production cut, suggests White House wanted delay until after midterms

Saudi Arabia’s ministry of foreign affairs put out a rare statement on Thursday defending the Organization of the Petroleum Exporting Countries’ decision last week to cut production, and suggested the White House was acting due to its own political motives.

Last week, the OPEC+ grouping that also includes Russia agreed to cut their supply target by 2 million barrels a day, beginning in November.

That triggered a rise in oil prices, though they have eased this week: U.S. oil benchmark West Texas Intermediate crude for November delivery
CL.1,
+0.32%

CL00,
+0.32%

CLX22,
+0.32%

was up 0.3% to $87.32 a barrel on Thursday. The global benchmark Brent crude
BRN00,
+0.35%

BRNZ22,
+0.35%

for December was up 0.24% to $92.66 a barrel on ICE Futures Europe.

The move stoked already strained geopolitical tensions between Saudi Arabia and the U.S, with President Joe Biden telling CNN that there will be “consequences” for the cut.

Biden’s national security adviser Jake Sullivan came out to say that he “can’t put a date or a time on when the president will announce any given step” on when Saudi Arabia would face consequences, that could involve Biden asking Congress to possibly support pausing arms sales to the country.

The Saudi ministry of foreign affairs responded that the claim that the cut was politically motivated against the U.S “are not based on facts” and is based the OPEC+ decision “out of its purely economic context.”

“The Kingdom affirms that the outcomes of the OPEC+ meetings are adopted through consensus among member states and that they are not based on the unilateral decision by a single country,” the statement published on Thursday said.

The rare and detailed statement from the Saudi government also outlined that the Kingdom has not been influenced by its stance on the Russia-Ukraine war.

The statement also suggested that the U.S government had quietly consulted with the Saudis about postponing the OPEC+ decision for one month, which it said “would have had negative consequences.” That’s suggestive that the White House was trying to keep gas prices low ahead of November’s midterm elections.

The International Energy Agency on Thursday said the oil supply reduction would worsen the global energy crisis by exacerbating high oil prices and tightening the market, outlined in its monthly report.

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