U.S. Overreaction to OPEC+ Production Cut
OPEC and its partners such as Russia, known as OPEC+, announced on October 5 that it will cut its total oil production quota by two million barrels per day. This decision, its impetus, and implications have been badly misunderstood in Washington. Rather than a drastic politically-motivated production cut that will send oil prices skyrocketing in order to aid Russia and spite the United States, the move will result in a modest actual production cut, based on economic considerations driven by OPEC+’s forecast of dwindling global oil demand. The United States should avoid overreacting to the OPEC+ decision and should reengage in discussions with Saudi officials on how to rebuild a more constructive partnership between Washington and Riyadh.
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Andrew Ghalili – Senior Policy Analyst