The government of Pakistan on Tuesday endorsed the decision of Saudi Arabia, as the de facto head of Organization of Petroleum Exporting Countries and allies (OPEC+), of slashing oil production by 2 million barrels per day (bpd).
“In the wake of statements made against the Kingdom in the context of OPEC + decision, Pakistan expresses solidarity with the leadership of the Kingdom of Saudi Arabia,” said a statement from the Ministry of Foreign Affairs. “We appreciate the concerns of the Kingdom of Saudi Arabia for avoiding market volatility and ensuring global economic stability.”
The statement added that Pakistan encourages a constructive approach on such issues based on engagement and mutual respect.
OPEC+ agrees deep oil production cuts
“We reaffirm our long-standing, abiding and fraternal ties with the Kingdom of Saudi Arabia,” it said.
On October 6, OPEC+ agreed steep oil production cuts, curbing supply in an already tight market, causing one of its biggest clashes with the West as the US administration called the surprise decision shortsighted.
OPEC’s de-facto leader Saudi Arabia said the cut of 2 million barrels per day (bpd) of output - equal to 2% of global supply - was necessary to respond to rising interest rates in the West and a weaker global economy.
The kingdom rebuffed criticism it was colluding with Russia, which is included in the OPEC+ group, to drive prices higher and said the West was often driven by “wealth arrogance” when criticising the group.
The White House said President Joe Biden would continue to assess whether to release further strategic oil stocks to lower prices.
“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,” the White House said.
Saudi Arabia says OPEC+ oil cut 'purely economic'
Joe Biden vowed consequences for Saudi Arabia over its explosive slash in oil output but, like previous US presidents irked by the kingdom, he may find constraints as he assesses options. Later, Biden pledged “there will be consequences” for US relations with Saudi Arabia
His announcement had come a day after powerful Democratic Senator Bob Menendez, chairman of the Senate Foreign Relations Committee, said the United States must immediately freeze all cooperation with Saudi Arabia, including arms sales.
Biden, in an interview with CNN’s Jake Tapper, would not discuss what options he was considering.
White House press secretary Karine Jean-Pierre said a policy review would be conducted but gave no timeline for action or information on who would lead the re-evaluation.
The United States accused Saudi Arabia of kowtowing to Russia, which objects to a Western cap on the price of Russian oil spurred by the Ukraine invasion.
US officials had been quietly trying to persuade its biggest Arab partner to nix the idea of a production cut, but Saudi Arabia’s de-factor ruler, Crown Prince Mohammed bin Salman, was not swayed.
In response, Saudi Arabia rejected as "not based on facts" statements criticising the kingdom after the OPEC+ decision, saying it serves the interests of both consumers and producers.
Saudi Arabia, US clash over reason for OPEC+ oil cut
The OPEC+ decision was adopted through consensus, took into account the balance of supply and demand and was aimed at curbing market volatility, the Saudi foreign ministry said in a statement last week.
The White House pushed back, saying it presented the Saudis with an analysis that showed the cuts could hurt the world economy. The back-and-forth has added to what has already been a frosty period of relations for the two countries, who have had an energy-for-security alliance for decades.
Over a barrel, Biden faces tough options with Saudis
The cut came even though fuel markets remain tight, with inventories in major economies at lower levels than when OPEC has cut output in the past.
The United Arab Emirates also believes OPEC+ made the correct technical choice when it agreed to cut production and the unanimous decision had nothing to do with politics, energy minister Suhail al-Mazrouei said on Tuesday.
Mazrouei said the decision stabilised prices, rather than increasing them, adding that it was the lack of stability that was driving investors away.