The oil cartel OPEC’s choice to pare back oil supply will harm the global economy and especially developing countries, U.S. Treasury Secretary Janet Yellen told the Financial Times in an interview published Sunday.
“I think OPEC’s decision is unhelpful and unwise — it’s uncertain what impact it will end up having, but certainly, it’s something that, to me, did not seem appropriate, under the circumstances we face,” Yellen said, adding that “we’re very worried about developing countries and the problems they face.”
The cartel of 13 oil-producing countries on Wednesday agreed to reduce production by 2 million barrels a day as of November, in the context of an already tight market and rising world inflation in part caused by high energy prices.
OPEC’s move marks a victory for Russia against the EU and the U.S. — Russia’s a major oil producer and an OPEC+ country that cooperates with the cartel. Ever since Moscow’s invasion of Ukraine, the West has been imposing economic sanctions against Russia, including on its oil sector, and encouraging other countries around the world to follow suit. Despite this effort, Moscow continues to sell its oil to countries like India, China and Turkey.
OPEC took the decision despite a flurry of trips by EU and U.S. leaders to Saudi Arabia in recent weeks to try to convince the country’s crown prince and new Prime Minister Mohammed bin Salman to ramp up oil production to fight inflation.
The world oil price already started to rise after the announcement on Wednesday, moving from around $86 to over $93 per barrel.
