The White House angrily pushed back at the oil producer group after they announced their largest supply cut since 2020
Energy analysts think the deep production cuts could backfire on Saudi Arabia, as Biden said Congress would soon seek to rein in the group's influence over energy prices.
The production of oil will be reduced by 2 million barrels per day from November. The price of oil had fallen from more than $120 a barrel in early June to around $80 a barrel today.
West Texas Intermediate futures, meanwhile, stood at $87. 81, almost 1% higher.
The energy alliance, which includes Russia, was urged by the U.S. to do more to help the global economy and lower fuel prices.
The White House said Biden was "disappointed by the shortsighted decision by OPEC+ to cut production quota while the global economy is dealing with the continued negative impact of Putin's invasion ofUkraine."
The Department of Energy was ordered by Biden to release another 10 million barrels from the reserve.
"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."
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.
The strategists said that they were unlikely to see another blockbuster release in the near term.
The introduction of US product export restrictions in a rising retail gasoline price environment is a more clear risk, according to analysts at Royal Bank of Canada.
The NSC statement about working with Congress to reduce OPEC's influence on the oil market appears to be a credible outcome of congressional action on NOPEC legislation. The White House's opposition to NOPEC has been restraining.
"Today's dog whistle may be seen as a sign that the President will not stand in the way of a floor vote on the bill that would declare a group of people a group of people."
The No Oil Producing and Exporting Cartels bill is intended to protect consumers and businesses from oil spikes.
The U.S. legislation, which passed a Senate committee in early May but has not been signed into law, could expose OPEC countries and partners to lawsuits for orchestrating supply cuts that raise global crude prices
The bill needs to be passed by the Senate and the House before it can become law.
The NOPEC bill would cause more chaos to the energy markets, warned top OPEC ministers.
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 stabilizing force to bring about stability."
The secretary-general of the Organization of the Petroleum Exporting Countries defended the group's decision to impose deep output cuts.
When asked if the organization was doing so at a price, Al Ghais said "everything has a price." There is a price for energy security.
Three months ago, Biden traveled to Saudi Arabia to urge the world's largest oil exporter to increase oil production in order to bring down gasoline prices. The trip was part of an effort to improve relations with Riyadh after the murder of a journalist.
The increase in oil production by the group was seen as an insult to Biden.
Saudi Arabia's Abdulaziz bin Salman was asked if the group was using energy as a weapon after it imposed deep production cuts.
The impact of the group's supply cuts for November is likely to be limited, with Saudi Arabia, the United Arab Emirates, Iraq and Kuwait likely to do the main work, according to energy analysts.
As the energy market faces uncertainty of more European sanctions on Russia amid the Kremlin's onslaught in Ukraine, it is hard for the Organization of the Petroleum Exporting Countries to form a view more than a month or two into the future.
"The Saudis are saying that this was a market-driven decision, that they expect demand to drop over the winter, and I can't see how a cut of this volume is anything less than a political statement," said Michael Stephens, an associate fellow at the Royal United Services Institute
It is not how the US is interpreting it, even if it were based on technical reasons. Perception is the majority of the law. The perception is that the Saudis are not keeping their end of the bargain.
Even if the Saudis coordinate with Russia on oil prices, that is going to be seen as overt support for Russia.
Oil prices have fallen to roughly $80 from over $120 in early June amid growing fears about the prospect of a global economic recession.In an interview with CNBC, Herman Wang, managing editor of OPEC and Middle East news at S&P Global Platts, said that they were imposing deep output cuts with a longer view towards taking them through a potential global economic recession.
It comes at a politically dicey time for the US, which is heading into the elections, and the White House doesn't want to see gasoline prices spike.
There are potential ramifications to this beyond the oil price, even though the group likes to say they keep politics out of their decisions.
The Secretary of State said at the news conference that Washington has made it clear to the members of the Organization of the Petroleum Exporting Countries.
When asked if he was disappointed with the U.S. ally Saudi Arabia, he replied, "We have a lot of interests in Saudi Arabia."
Relations between Israel and Yemen are improving, as are relations between Arab countries and Riyadh.
"But we are working every single day to make sure to the best of our ability that energy supply from wherever is meeting demand in order to ensure that energy is on the market and that prices are kept low."
"OPEC's decision to cut back on production is a blatant attempt to increase gas prices at the pump that cannot stand", said Sen.
"We must eliminate military assistance to Saudi Arabia and end the illegal price fixing by the OPEC group," he said.
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