Biden affirms commitment to lowering energy prices following OPEC cut

• 

US President Joe Biden is committed to taking all necessary steps to increase energy stockpiles while decreasing energy prices that have been on a sharp incline over the past few months, the White House said on Monday.

The White House statement came after the Organization of the Petroleum Exporting Countries (OPEC) and its allies agreed to cut production by a small margin.

"The president has been clear that energy supply should meet demand to support economic growth and lower prices for American consumers and consumers around the world," White House Press Secretary Karine Jean-Pierre said in a statement.

On Monday, OPEC+ declared its intention to resume oil production at the August level and cut it by 100,000 barrels per day (BPD) in October.

"[OPEC+ decodes to] Revert to the production level of August 2022 for OPEC and non-OPEC Participating Countries for the month of October 2022 as per the attached table, noting that the upward adjustment of 0.1 mb/d to the production level was intended only for the month of September 2022," the intergovernmental organization said in a statement.

"This decision was made due to the fact that we considered the current situation on the market, made an assessment, and heard the report of the OPEC + technical committee," Russian Deputy Prime Minister Alexander Novak said.

OPEC+ will be meeting again in October and will continue to monitor the market situation, said Novak, given that the G7 group is set to put a price cap on Russian oil.

Biden had previously tried to convince the organization to increase its oil output in a bid to cool the red-hot energy prices, traveling to Saudi Arabia with hopes of persuading Saudi Arabia to promise to increase its oil output and relieve the pressure on the global supply chain.

However, the price of oil rose even further after he left West Asia without striking a deal with Saudi Arabia on Riyadh pumping out more oil.

Saudi Arabia and the United Arab Emirates have been viewed as the only two countries in the world's producer group, the Organization of Petroleum Exporting Countries, that have some spare capacity and could help increase global deliveries.

United Arab Emirates Crown Prince Sheikh Mohammed bin Zayed told French President Emmanuel Macron in late June that Saudi Arabia and the United Arab Emirates could barely increase oil production.

Saudi Arabia currently produces 10.5 million BPD and has a nameplate capacity of 12.0 million-12.5 million BPD, allowing it to increase output by 2 million.

The UAE produces approximately 3 million BPD, has a capacity of 3.4 million, and is working to increase it to 4 million BPD.

If the OPEC+ countries could increase their supply, then the pressure would ease at the pumps where drivers have been hit with record-high gas and diesel prices.

Attempting to curve the prices of oil in the US when all else failed, Washington has been actively using its Strategic Petroleum Reserve (SPR) for over a year. 

At the current pace of oil production, the reserves will shrink to a 40-year low with only 358 million barrels remaining by the end of October. Last year, the SPR location in Texas and Louisiana reportedly contained 621 million barrels. According to official information, the US is set to stop extractions from SPR in October.