Oil Prices Rise After OPEC+ Cuts Production

OPEC+ surprised markets on Monday by cutting oil production by 1.16 million barrels per day, causing crude oil prices to rise sharply. 

The Details: The production cuts will run from May to the end of 2023. About half of the cuts, 500,000 barrels per day, will come from Saudi Arabia alone; a Saudi official called the move “a precautionary measure aimed at supporting the stability of the oil market.” As of Monday afternoon, crude oil prices had risen by over 6%. No change in gasoline prices had yet been reported by AAA, a widely-cited price tracker, but analysts generally expected gas prices to rise. Prices for natural gas, on the other hand, had dropped 5.7% by Monday afternoon. 

For Context: OPEC+ drew geopolitical attention in 2022, when oil and gasoline prices spiked to record highs after Russia’s invasion of Ukraine. OPEC+ agreed to raise oil production in June, when prices peaked, but then cut production in October once prices had dropped. The October cuts led the Biden administration to say it would “re-evaluate” its relationship with Saudi Arabia. 

How the Media Covered It: Coverage was widespread, particularly in business outlets. Some coverage from the right tied OPEC’s decision to President Joe Biden’s foreign policy or his support for renewable energy; The Daily Wire (Right bias) began an article by saying Saudi Arabia’s relationship with the U.S. “has taken a nosedive during President Joe Biden’s tenure.”