Russia, KSA feeding inflation via oil production cut: Biden

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Russia and Saudi Arabia are exacerbating inflation in the United States by reducing oil production by 2 million barrels per day starting November, US President Joe Biden said on Friday, failing to see that inflation is surging due to his policies.

"Every kitchen table cost is going to go up, not down, and I realized costs are going up on food and I was able to bring gasoline down well over $1.60. But this is inching up because of what the Russians and the Saudis just did," Biden said during a visit to Maryland.

The Organization of the Petroleum Exporting Countries (OPEC)'s member states voted on Wednesday on cutting their production of oil and agreed to reduce their oil production by 2 million barrels a day in light of the world's surging energy crisis.

Earlier reports suggested that OPEC's Joint Ministerial Committee (JMMC) recommended cutting oil production by 2 million barrels per day.

The US is concerned that OPEC's probable decision to reduce oil production will pose serious problems for the country and may even be interpreted as a hostile act, according to a US Treasury report.

The Biden administration assembled its top energy, economic, and foreign policy officials and entrusted them with lobbying Middle East allies such as Saudi Arabia, the United Arab Emirates, and Kuwait to vote against decreasing oil production.

To persuade its OPEC allies, the US proposed to purchase back up to 200 million barrels of oil from its OPEC partners.

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

In a statement, the OPEC+ alliance said that "[OPEC+ decides 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."  

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.

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.

US national outstanding debt exceeded $31 trillion for the first time in its history according to the US Treasury. This comes at a time when the US is faced with all-time high inflation coupled with high-interest rates, all of which deepen the economic uncertainty problem that the government, businesses, and people are all facing.

The Committee for a Responsible Fiscal Budget (CRFB) forecasted last month that President Joe Biden's policies might raise deficits by $4.8 trillion between 2021 and 2031.

It is worth noting that the economic situation which is affecting the financial standpoints of American families and businesses is burdening Biden's popularity, which will affect his chances of winning the midterm congressional elections which will take place in early November.