America’s inflation woes are likely to intensify further after Saudi Arabia revealed in a surprise announcement that it is slashing oil output.
On Sunday, the Saudis announced that the country is rolling out voluntary cuts to the Kingdom’s oil production.
Russia and other OPEC+ oil producers are joining Saudi Arabia in slashing output.
According to Reuters, as much as 1.15 million barrels per day will stop being produced.
The oil cuts are expected to lead to higher gas prices in the United States.
The Saudis and OPEC+ said the oil production cuts are designed to support market stability.
This won’t help inflation. https://t.co/ZuTp91Lnzl
— Diamond Options💎 (@diamondoptions2) April 2, 2023
The move will dismay Democrat President Joe Biden’s administration.
The surprise reduction marks the second output cut these countries have agreed to in the past year.
In October 2022, the OPEC coalition, led by the Saudis and Russians, announced 2 million barrels per day would be cut in production until November 2023, as Slay News reported at the time.
The White House has called for lower prices for oil to stimulate the economy.
The Biden admin has also claimed that lower prices would prevent Vladimir Putin from profiting from oil sales as the Russia/Ukraine conflict continues.
Following the October 2022 cuts, Biden claimed Saudi Arabia would be facing “consequences.”
Democrat members of Congress also echoed a call for the U.S. to freeze cooperation with Saudi Arabia.
Despite the public chest-thumping from the Biden admin, however, no “consequences” have yet to emerge.
Meanwhile, Saudi Arabia has denied supporting Russia in its Ukraine conflict, despite the oil cuts.
Nevertheless, this move brings the Saudis into a closer alliance with Putin.