Saudi Arabia, whose relationship with the United States has taken a nosedive during President Joe Biden’s tenure, announced on Sunday it would lead the members of the Organization of the Petroleum Exporting Countries (OPEC), including Russia, to cut over one million barrels of output a day starting next month, which could cause higher U.S. inflation.
Saudi Arabia also stated it would cut production by another 500,000 barrels a day starting in May. Oil prices soared 7.5% at the week’s open after the Saudi announcement. Kevin Book, managing director of Clearview Energy Partners, told CBS News the cuts could cause U.S. gasoline prices to rise roughly 26 cents per gallon.
The move on Sunday follows OPEC’s decision last October to reduce production by two million barrels a day. “There’s going to be some consequences for what they’ve done with Russia,” Biden threatened in October. “I’m not going to get into what I’d consider and what I have in mind. But there will be — there will be consequences.”