The Organization of Petroleum Exporting Countries and its allies announced plans Wednesday to cut oil production by 2 million barrels per day beginning in November.
The decision by the group, known as OPEC+, comes after it has increased output since oil demand plummeted early in the COVID-19 pandemic.
Oil prices have fallen to roughly $80 a barrel from more than $120 in early June amid growing fears about the prospect of a global economic recession, according to CNBC.
OPEC Secretary-General Haitham Al Ghais defended the group’s decision to impose a deep output cut, saying at a news conference that OPEC+ was seeking to provide “security [and] stability to the energy markets.”
Asked by CNBC’s Hadley Gamble whether the alliance was doing so at a price, Al Ghais replied: “Everything has a price. Energy security has a price as well.”
President Joe Biden called the group’s decision unnecessary and said more releases from U.S. petroleum reserves are possible.
He previously ordered the release of an extra 1 million barrels of oil per day from the nation’s strategic petroleum reserve in July as gas prices climbed above $4 per gallon throughout the United States.
“I need to see what the detail is. I am concerned, it is unnecessary,” Biden said Wednesday as he left the White House to tour hurricane-ravaged areas of Florida, according to CNN.
Bloomberg reported that the White House’s national security adviser, Jake Sullivan, and National Economic Council Director Brian Deese said in a statement that the United States would release another 10 million barrels of oil from the Strategic Petroleum Reserve in November.
“He is directing the Secretary of Energy to explore any additional responsible actions to continue increasing domestic production in the immediate term,” they said.
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