Oil prices rose on Monday following news that the Organization of the Petroleum Exporting Countries (OPEC+) had unexpectedly cut oil production by more than one million barrels daily.
Excellent explanation of impacts from OPEC oil production cuts.
— Wall Street Silver (@WallStreetSilv) April 3, 2023
The price of oil globally has shot up 6% from the previous price when the market closed on Friday.
In an press release on Monday, OPEC+ revealed that several oil-producing countries — Algeria, Gabon, Iraq, Kazakhstan, Kuwait, Oman, Saudi Arabia and United Arab Emirates — are going to be cutting production collectively by more than one million barrels per day, beginning in May.
Meanwhile, Russia has also announced a decrease in production — stating that they would only be producing 500,000 barrels of oil per day until the end of 2023.
These two announcements put total oil production from most OPEC+ members and Russia at roughly 1.6 million barrels per day.
However, the decrease in oil production is especially concerning considering the fact that OPEC+ previously announced a two million barrel per day reduction in October. According to OPEC+, the new cuts are in addition to the previous reduction, which went into effect in November.
While this new cut in oil production is likely to have an effect on the price of gas in the U.S., Americans have already been struggling with rising gas prices over the past month. According to gas price monitor AAA, the average price per gallon of regular gas as of Monday evening is $3.51, up from $3.39 a month ago.
During a Monday appearance on Fox Business Network’s “Bottom Line,” Sen. Markwayne Mullin (R-OK) blasted President Joe Biden for his failed energy policies in the wake of the news of OPEC+’s production cut.
While Biden has consistently attacked U.S. energy independence, he has left us dependent on foreign countries for oil — meaning that any cuts in production overseas could devastate the U.S. economy.
OPEC+ announced an oil production cut.
The Strategic Petroleum Reserve is at historic lows.
Biden will block efforts to boost U.S. oil production.
Get ready for more pain at the pump.
— Daniel Turner (@DanielTurnerPTF) April 3, 2023
“He cut 800,000 barrels a day coming in from Canada off the Keystone Pipeline by canceling the permit on that,” Mullin said. “He’s cut production [on] public lands, well over a million barrels per day. And when you start talking about the slow-walking of permits that he’s doing right now and the way he’s turned down the volume that we can move product from point A to point B with crude and natural gas in our pipeline system, it equates over to 2.5 million of barrels per day.”
“This 1.7 million per day [reduction] wouldn’t even be a hiccup if we were still on the path that Trump had us on to energy independence,” the Republican senator added. “Instead, we are now dependent on a cartel in Saudi Arabia, who just made an economic deal with Iran, by the way — who’s not a friend of ours — and Russia. They’re laughing all the way to the bank at our expense because we have an incompetent President in the White House.”