Saudi Arabia Says Team Biden Asked OPEC+ To Delay Output Decision By A Month, But It Would've Had 'Negative Consequences'

Saudi Arabia has hinted that the Biden Administration had suggested delaying the decision by the Organization of the Petroleum Exporting Countries and its allies (OPEC+) to reduce its production output by a month, which it believed “would have had negative economic consequences.”

Saudi Statement: “The Government of the Kingdom of Saudi Arabia ... clarified through its continuous consultation with the U.S. Administration that all economic analyses indicate that postponing the OPEC+ decision for a month, according to what has been suggested, would have had negative economic consequences,” Saudi Arabia said.

Also Read: Investing For Beginners

Saudi Arabia also asserted it “affirms its rejection of any dictates, actions, or efforts to distort its noble objectives to protect the global economy from oil market volatility.”

Oil prices shot up after OPEC+'s decision to cut output, and moved northwards on Thursday over low diesel inventory ahead of winter. The United States Brent Oil Fund BNO closed over 2% higher on Thursday, while the Vanguard Energy Index Fund ETF VDE closed over 4% higher. 

Why It Matters: The Saudi response comes in the wake of President Joe Biden stating there would be “consequences” for Saudi Arabia for collaborating with Russia to trim oil production and his staff saying he would re-evaluate the relationship with the kingdom.

Pentagon Response: In response, Pentagon spokesman John Kirby accused the kingdom of helping Russia’s revenues and hampering the impact of Western sanctions on Moscow, reported CNBC.

“In recent weeks, the Saudis conveyed to us – privately and publicly – their intention to reduce oil production, which they knew would increase Russian revenues and blunt the effectiveness of sanctions. That is the wrong direction,” Kirby reportedly said.

“We presented Saudi Arabia with analysis to show that there was no market basis to cut production targets, and that they could easily wait for the next OPEC meeting to see how things developed,” he said.

Read Next: Joe Biden Says Saudi Arabia Will Face 'Consequences For What They've Done With Russia'