Biden Abandoned Pledge To Punish OPEC. It Just Slashed Oil Production Again.

Oil prices surge after Saudi-led cartel announces production cut

U.S. president Joe Biden fist-bumps Saudi leader Mohammed bin Salman / Reuters
April 3, 2023

Oil prices surged Monday after OPEC announced it would cut production, a move that comes just months after President Joe Biden abandoned a pledge to punish the Saudi-led cartel for past production cuts.

Crude prices jumped as much as 8 percent in early trading Monday morning, marking their largest single-day jump in more than a year, according to Bloomberg. Just hours before the price spike, OPEC—the Saudi-led cartel that controls roughly half of the world's oil production—said it would cut output by more than one million barrels per day.

This is not the first time OPEC has announced such a production cut in the last six months alone. The organization in October announced a similar cut of two million barrels per day, prompting Biden to vow "consequences" for Saudi Arabia. But the Democrat never made good on his threat—instead, Biden's administration quickly "ended its talk of retaliation," the Washington Post reported in January, going as far as to praise the Saudis for working to advance "U.S. interests."

Biden's National Security Council in a Sunday statement criticized OPEC's decision as unadvisable but did not tease any action to combat the oil production cut. Daniel Turner, the founder and executive director of energy group Power the Future, said that response is not enough.

"Only a few short years ago foreign governments were unable to use energy as a weapon against the United States. Then Joe Biden came along and made OPEC great again," Turner said. "President Biden finally needs to put politics aside and unleash the power of American energy. Otherwise, we are headed back to $4 dollar a gallon gasoline as the norm, among many other unpleasant factors."

The White House did not return a request for comment. OPEC's cuts—which will take effect in May—are expected to push U.S. gasoline prices up by nearly 30 cents per gallon this summer, a season that already comes with peak gas prices due to increased driving demand. As a result, gas could exceed $4 per gallon nationwide in a few short months, an average price not seen since August.

Biden on the 2020 campaign trail railed against U.S. oil and gas production, promising to "end fossil fuel." "No ability for the oil industry to continue to drill, period, ends, number one," the Democrat said during a March 2020 debate. Biden went on to cancel the Keystone XL pipeline and implement a moratorium on new gas leases within days of taking office, moves that preceded a record-high spike in gas prices. In June 2022, the average price for a gallon of gas in the United States hit $5 for the first time ever.

Biden responded to that spike by urging the oil industry to "increase domestic production and keep gas prices down." Biden administration officials, however, have pressured oil companies to do the opposite, citing the need to fight climate change. Biden climate czar John Kerry in March criticized plans from Chevron and BP to increase oil and gas investments, calling on those companies to "take stock … of where the science is today" and recognize that increased oil production is at odds with global climate initiatives.