Biden Administration Downplays Effect of Surprise OPEC+ Production Cuts

National Security Council Coordinator for Strategic Communications John Kirby speaks during a daily press briefing at the James S. Brady Press Briefing Room in the White House on March 21, 2023. (Anna Moneymaker/Getty Images)

The Biden administration is downplaying the effect of the surprise decision by OPEC+ to continue production cuts, insisting that the situation is different than last year.

This response contrasts the administration’s stance in October 2022, when President Joe Biden threatened consequences for Saudi Arabia after the OPEC+ cut. The administration’s current response was outlined by National Security Council spokesman John Kirby at an April 5 White House briefing.

He noted that oil has traded down for the past month to about $80 per barrel, reaching as low as $63 last month. By comparison, last year, prices soared to well above $110, even hitting $139 briefly in overnight trading in early March 2022. During the prior OPEC+ cut in October 2022, the price per barrel sat at $88.

Kirby also noted that prices at the pump have decreased significantly since last year, dropping more than $1.50 per gallon from last summer’s peak.

“Last year, analysts predicted prices would go higher, but the president’s policies helped lower them,” he said, referring to Biden’s decision to release oil from the Strategic Petroleum Reserve.

Kirby emphasized that the administration will continue to work with producers and consumers to ensure that markets support economic growth and lower prices.

“We’re going to continue to do what we have to do to assist in balancing supply and demand,” he said. “We’re going to continue to work with our partners around the world to ensure that we have an adequate supply of oil to meet our needs.”

In contrast, in October 2022, Biden threatened consequences for Saudi Arabia after the OPEC+ cut.

In an interview with CNBC at the time, the president said, “If OPEC+ chooses to continue down this path, we will take appropriate action, including potentially imposing consequences on Saudi Arabia, which has the most spare capacity and the most sway within OPEC.”

On April 5, when pressed about the disparate responses, Kirby said the administration’s response wasn’t inconsistent, as the two situations aren’t alike.

“Your question presupposes that with every muscle movement, at whatever interval, we have to react in exactly the same way,” he said. “The situation is different now than it was last year, and I stand by everything that we said about it.”

The OPEC+ decision to extend production cuts has sparked concerns about rising oil prices, which could significantly impact the U.S. economy. Kirby said the administration is closely monitoring the situation and is prepared to take action if necessary.

“We’re going to continue to watch the markets closely,” he said. “If we see any issues that arise, we’re going to be prepared to act.”