U.S. delivers angry rebuke of massive OPEC+ production cut — and it could backfire for Saudi Arabia
Energy analysts believe the deep production cuts could yet backfire for OPEC kingpin and U.S. ally Saudi Arabia.
Mandel Ngan | Afp | Getty Images
The White House angrily pushed back at OPEC+ after the oil producer group announced its largest supply cut since 2020, lashing out at what President Joe Biden’s administration described as a “shortsighted” decision that came despite U.S. pressure to pump more to help the global economy.
Energy analysts believe the deep production cuts could yet backfire for OPEC kingpin and U.S. ally Saudi Arabia, particularly as Biden hinted Congress would soon seek to rein in the Middle East-dominated group’s influence over energy prices.
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OPEC and non-OPEC allies, a group often referred to as OPEC+, agreed on Wednesday to reduce oil production by 2 million barrels per day from November. The move is designed to spur a recovery in oil prices, which had fallen to roughly $80 a barrel from more than $120 in early June.
International benchmark Brent crude futures traded at $93.53 a barrel during Thursday morning deals in London, up around 0.2%. U.S. West Texas Intermediate futures, meanwhile, stood at $87.83, almost 0.1% higher.
The U.S. had repeatedly called on the energy alliance, which includes Russia, to pump more to lower fuel prices ahead of midterm elections next month.
In a statement, the White House said Biden was “disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin’s invasion of Ukraine.”
It added that Biden had directed the Department of Energy to release another 10 million barrels from the Strategic Petroleum Reserve next month.
“In light of today’s action, the Biden Administration will also consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices,” the White House said.
Today’s dog whistle may be interpreted as a sign that the President will not necessarily stand in the way of a floor vote on the bill that would declare OPEC a cartel and subject the members to Sherman anti-trust legislation.
Helima Croft
RBC Capital Markets
Strategists led by Helima Croft at RBC Capital Markets said that while the U.S. signaled further Strategic Petroleum Reserve releases were in the offing, they were unlikely to see another blockbuster release in the near term.
“A more clear risk, in our view, is the introduction of US product export restrictions in a rising retail gasoline price environment,” analysts at RBC Capital Markets said.
“Congressional action on NOPEC legislation also looks like a credible outcome in light of the NSC statement about working with Congress to reduce OPEC’s overall influence on the oil market. White House opposition to NOPEC has served as a restraining influence on Congressional leaders,” they continued.
“Today’s dog whistle may be interpreted as a sign that the President will not necessarily stand in the way of a floor vote on the bill that would declare OPEC a cartel and subject the members to Sherman anti-trust legislation.”
What is NOPEC?
The No Oil Producing and Exporting Cartels, or NOPEC, bill is designed to protect U.S. consumers and businesses from artificial oil spikes.
The U.S. legislation, which passed a Senate committee in early May but has not yet been signed into law, could expose OPEC countries and partners to lawsuits for orchestrating supply cuts that raise global crude prices.
To take effect, the bill would need to be passed by the full Senate and the House, before being signed into law by the president.
Top OPEC ministers have previously criticized the NOPEC bill, warning the U.S. legislation would bring greater chaos to energy markets.
Speaking at a news conference in Vienna, Austria, on Wednesday, Saudi Energy Minister Prince Abdulaziz bin Salman said, “We will continuously prove that OPEC+ is here not only to stay but here to stay as a moderating force to bring about stability.”
OPEC Secretary-General Haitham Al Ghais also defended the group’s decision to impose deep output cuts, saying the alliance was seeking to provide “security [and] stability to the energy markets.”
Asked by CNBC’s Hadley Gamble whether OPEC+ was doing so at a price, Al Ghais replied: “Everything has a price. Energy security has a price as well.”
OPEC+ decision ‘cannot stand’
Energy analysts said the actual impact of the group’s supply cuts for November was likely to be limited, with unilateral reductions by Saudi Arabia, the United Arab Emirates, Iraq and Kuwait likely to do the main job.
What’s more, analysts said it is currently difficult for OPEC+ to form a view more than a month or two into the future as the energy market faces the uncertainty of more European sanctions on non-OPEC producer Russia — including on shipping insurance, price caps and reduced petroleum imports.
Oil prices have fallen to roughly $80 from over $120 in early June amid growing fears about the prospect of a global economic recession.
Bloomberg | Getty Images
Speaking at a news conference during a visit to Chile, U.S. Secretary of State Antony Blinken said Wednesday that Washington has made its views clear to OPEC members.
Asked whether he was specifically disappointed with U.S. ally Saudi Arabia, Blinken replied, “We have a multiplicity of interests with regard to Saudi Arabia and I think the President laid those out during his trip.”
These include improving relations between Arab countries and Israel, Yemen and working closely with Riyadh to try to continue the truce, Blinken said.
“But we are working every single day to make sure to the best of our ability that, again, energy supply from wherever is actually meeting demand in order to ensure that energy is on the market and that prices are kept low.”
Sen. Bernie Sanders, I-Vt., said via Twitter: “OPEC’s decision to cutback on production is a blatant attempt to increase gas prices at the pump that cannot stand.”
“We must end OPEC’s illegal price-fixing cartel, eliminate military assistance to Saudi Arabia, and move aggressively to renewable energy,” he added.
The Mockingbird Solar Center, Ørsted’s largest solar project globally, is now online, next to protected prairie donated by the renewable energy giant.
This massive 468-megawatt (MW) solar farm is set to power 80,000 homes and businesses, providing a major boost to the Texas grid.
But the launch of Mockingbird Solar isn’t just about clean energy – it’s also about restoring precious ecosystems. Ørsted has donated 953 acres of the Smiley-Woodfin Native Prairie Grassland, which sits next to the solar center, to The Nature Conservancy. The donated land is now the Smiley Meadow Preserve, a protected area for tallgrass prairie that’s home to more than 400 species of grasses and wildflowers.
Tallgrass prairies are some of the rarest ecosystems in the US, with less than 1% of Texas’ original tallgrass prairies still in existence. Tallgrass prairie does a lot of heavy lifting for the environment, including storing carbon, preventing floods, and providing crucial habitats for pollinators.
“Native prairies are the rarest landscapes left in Texas – so much so that many people have never seen one,” said David Bezanson, land protection strategy program director for The Nature Conservancy in Texas. He added that preserving Smiley Meadow will not only conserve one of the best prairie remnants left but also help restore other prairie habitats and boost regional biodiversity.
The Mockingbird Solar Center, a half-billion-dollar project, is part of Ørsted’s $20 billion push to expand renewable energy production across the US. Beyond generating electricity, it will inject $75 million into local property taxes, benefiting schools and other public services. The project also created over 550 construction jobs and will continue to be supported by operations staff moving forward.
Ørsted worked with US companies, including First Solar, for solar panels and partnered with local businesses like Drake Construction and Pfifer Farms for construction materials. It also gave more than $50,000 to local volunteer fire departments in Roxton and Brookston.
With Mockingbird Solar now up and running, Ørsted has more than 6 gigawatts of onshore wind, solar, and battery storage projects either in operation or being built across the US.
Read more: Ørsted got a huge Tesla battery storage system for the world’s single-largest offshore wind farm
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Jeep’s first global luxury electric SUV will arrive at US dealerships any day. Despite its $72,000 price tag, lease prices for the 2024 Jeep Wagoneer S EV start at just $599 per month.
2024 Jeep Wagoneer S EV lease prices
After unveiling its first global electric SUV, Jeep’s CEO said the Wagoneer S “marks a new chapter” in its storied history.
Jeep claims the Wagoneer S packs “exhilarating performance.” With 600 hp and 617 lb-ft of torque, the big-body SUV can sprint from 0 to 60 mph in just 3.4 seconds. Its 100 kWh battery pack also gives it a driving range of over 300 miles.
The electric SUV is unmistakably still a Jeep, but it did get several upgrades to distinguish it as an EV. The grille is now enclosed without the need to cool a massive engine, giving it a sporty, more modern look.
Jeep revamped its design with a new illuminated seven-slot grille with ambient cast lightning. It also fine-tuned its profile, adding flush door handles, a rear wing, and integrated fins for better airflow.
The first Jeep Wagoneer S Launch Edition models get exclusive dark accent design elements like 20″ Gloss Black Wheels.
Inside, the electric SUV is loaded with the latest tech and connectivity, including a best-in-class 45″ of usable screen space. The setup includes a 12.3″ center screen and an exclusive 10.25″ interactive front passenger screen.
Jeep already announced that the 2024 Wagoneer S EV will start at $71,995, but now the company has revealed lease prices for the first time.
According to Jeep, the 2024 Jeep Wagoneer S Launch Edition can be leased for $599 per month for 36 months (10,000 miles per year). The deal includes $4,999 due at signing and a $7,500 EV incentive. However, you may want to act fast, as Jeep’s offer is only good until December 2, 2024.
| Jeep Wagoneer S vs Tesla Model Y | Starting Price | Range | Lease Price |
| Jeep Wagoneer S Launch Edition | $71,995 | +300 miles | $599/mo |
| Tesla Model Y RWD | $44,990 | 320 miles | $299/mo |
| Tesla Model Y AWD | $47,990 | 308 miles | $399/mo |
| Tesla Model Y AWD Performance | $51,490 | 279 miles | $599/mo |
In comparison, Tesla Model Y RWD lease prices start at $299 for 36 months with $2,999 down (10,000 miles). The Performance AWD model starts at $599 per month. In an end-of-year promo, Tesla also offers 3 months of free Supercharging and Full Self-Driving.
Ready to drive off in your new electric SUV? We can help you get started. You can use our links below to view offers on the Jeep Wagoneer S and Tesla Model Y at a dealer near you.
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