Updates with details throughout
The White House said today it will work with Congress to potentially enable antitrust action against foreign producers after the Opec+ alliance slashed its crude production target.
President Joe Biden's administration will consult with Congress "on additional tools and authorities to reduce Opec's control over energy prices," the White House said. The judiciary committees in both chambers of Congress have approved legislation that would enable US prosecutors to sue foreign entities in US courts for anti-competitive behavior in oil markets. A version of legislation has been circulated in Congress for the past 15 years but has never reached the president's desk.
The strong reaction from the US administration comes in response to the Opec+ decision today to slash its crude production target by 2mn b/d from November. The change in production levels is likely to be less than 2mn b/d — quota-bound members produced 3.58mn b/d below target in August, according to an average of secondary source estimates. But today's action still led to backlash from Washington.
"The president is disappointed by the shortsighted decision by Opec+ to cut production quotas while the global economy is dealing with the continued negative impact of (Russian president Vladimir) Putin's invasion of Ukraine," White House national security adviser Jake Sullivan and national economic council director Brian Deese said in a joint statement.
The producers' alliance members made the decision "in their own purported self-interest" and "it is clear that Opec+ is aligning with Russia with today's announcement," the White House said.
"We think we have been doing what is best for years, and better than the US, to have a stable market," Congolese oil minister and Opec president Bruno Itoua said. "They want to rule the world. We are trying to make the world work according to our needs."
The Biden administration until today has refrained from open criticism of the Opec+ production agreement and of its leading producers. Biden in July visited Saudi Arabia and met with Saudi and other Arab leaders from the Mideast Gulf, in part, to discuss energy security, even though the White House billed the meetings as focusing on regional stability and peace.
"We've made our views clear to Opec members," secretary of state Tony Blinken said today during a visit to Santiago, Chile. "We are working every single day to make sure to the best of our ability that energy supply from wherever is actually meeting demand in order to ensure that energy is on the market, and the prices are kept low."
The White House statement comes with a renewed call on US oil companies to "keep bringing pump prices down by closing the historically large gap between wholesale and retail gas prices."
The administration tussled with US refiners in recent weeks over what the White House sees as inflated gasoline prices caused by insufficient domestic inventories. US average retail gasoline prices began to rise in mid-September after nearly three months of declines since hitting an all-time high, in nominal dollar terms, of $5/USG in mid-June.
The industry's response so far has focused on demanding that the administration fully rule out limits on exports of refined products from the US.
The administration said it is not considering additional releases from the Strategic Petroleum Reserve when the drawdowns ordered in March conclude in November. But Biden today directed the Department of Energy "to explore any additional responsible actions to continue increasing domestic production in the immediate term."
With midterm congressional elections next month, Biden's Republican opponents sense an opportunity to resume the line of attack on the Democrats over rising fuel prices. "The US should not have to beg other countries for oil," the Senate Republican caucus said in a tweet. "We have pipelines at home. Unleash our American energy now."
The White House said that the Opec+ decision shows the importance of reducing reliance on foreign sources of fossil fuels, highlighting the recently passed $369bn legislation to advance climate change and energy security policies.
