Janet Yellen says OPEC+ production cut is an ‘unconstructive act’

Janet Yellen says OPEC+ production cut is an 'unconstructive act'

U.S. Secretary of the Treasury Janet Yellen delivers opening remarks during an event highlighting “anti-corruption work as a cornerstone of a fair, accountable, and democratic economy” as part of the 2023 Summit for Democracy at the Treasury Department on March 28, 2023 in Washington, DC.

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WASHINGTON — Treasury Secretary Janet Yellen said the surprise OPEC+ oil production cut announced Sunday was an “unconstructive act,” which could hurt U.S. efforts to lower inflation.

“I think it’s a regrettable action that OPEC decided to take. I’m not sure yet just what the price impact will be, I think we need to wait a little longer for, you know, to really assess that,” Yellen told reporters Monday following an event at Yale University in New Haven, Conn.

Yellen also said the production cuts could, in the future, merit a reassessment of the current $60 per barrel price cap on Russian oil shipped in Western tankers. But she said that raising the cap was not necessary for now.

The voluntary cuts amount to more than 1 million barrels per day, beginning in May and running until the end of 2023, Saudi Arabia announced. The kingdom’s Energy Ministry called it a “precautionary measure” that aims to stabilize the oil market.

In Washington, the Biden administration sharply criticized the cuts.

“We don’t think cuts are advisable at this moment, given market uncertainty — and we’ve made that clear,” National Security Council spokesman John Kirby said Monday. He added that the United States received advance notice of the OPEC announcement.

The OPEC cut follows Russia’s recent decision to trim oil production by 500,000 barrels per day until the end of 2023.

— CNBC’s Kayla Tausche contributed to this report

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