OPEC's big oil drama

Good morning, readers.?Hallam Bullock here, reporting from London.?

It was a move the White House?went down to the wire to avoid . With Europe in the icy grip of an?energy crisis , grappling with inflation, and trying to stave off economic instability, OPEC+'s decision to?slash oil production ?could have big consequences for the global economy.?

Let's break it down.

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1. OPEC+ agreed to cut production.?The move would be a "total disaster," the White House said in a?last-ditch effort to dissuade OPEC+ , adding that it could be seen as a "hostile act."?

But the group — which includes Saudi Arabia, the United Arab Emirates, and Russia — agreed Wednesday to slash daily oil production by 2 million barrels, in a bid to send crude prices higher.

In the immediate wake of the decision, it appears to have worked. West Texas Intermediate crude advanced by 1.3% to $87.65 per barrel, while Brent crude, the international benchmark, rose 1.6% to $93.28.

As a result, the US could now see gasoline prices pushed higher?just weeks before the midterm elections. Meanwhile, Russian President Vladimir Putin, who has been accused of?weaponizing energy ?against countries opposing his invasion of Ukraine, will likely continue to reap revenue.?

The White House was not impressed. US President Joe Biden reportedly said he was "disappointed" by the move and called OPEC+ "shortsighted ."?

The US fears the decision has political as well as economic implications. "It's clear that Opec+ is aligning with Russia with today's announcement," White House spokesperson Karin Jean-Pierre said. Such an alliance would undermine western governments' attempts to hamper Russia's war efforts in Ukraine, and mark a significant moment in Saudi Arabia's 75-year energy relationship with the US,?the Financial Times reports .?

But OPEC+ defended their decision, saying it was in response to "uncertainty that surrounds the global economic and oil market outlooks." At a news conference after the meeting, the Saudi energy minister added: "We would rather be pre-emptive than be sorry ," the New York Times reports.

Ahead of the meeting, the EU moved closer to approving a?plan to cap the price of Russian oil .?The 27-country bloc agreed to begin penning legislation for the price cap, but formal approval will only come once the G7 has fully worked out how it would function. The US Treasury Department found the program could choke off?tens of billions of dollars in annual revenue ?for Moscow.

Russia, however, has warned that a price cap would backfire. The country's deputy prime minister, Alexander Novak, said the EU's plan could lead to Russia temporarily cutting oil production further — a move that would see crude prices rise, and gasoline follow.?

As per the Wall Street Journal, the Biden administration is also looking at?scaling down sanctions on Venezuela , as a possible means to allow Chevron to resume pumping oil to help fill the gap left by OPEC+'s supply cut. The details are reportedly still under discussion, but it could reopen US and European markets to oil exports from Venezuela, which was once a major oil producer pumping more than 3.2 million barrels a day during the 1990s.?

Read the full story. ?

What will the fallout from the decision be??Let?us know in the comments.

In other news:

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3. A 28-year-old former stock trader shared her top investing advice."If you're looking for returns today, tomorrow, or in less than a year, you are setting yourself up for unrealistic expectations," Lauren Simmons told Insider. Instead,?here's what she thinks you should do.

4. Ethereum will be the "primary on-ramp into crypto."?That's according to Joshua Lim, a former trading executive at Genesis Global Trading, who says bitcoin's investment case is weaker than ever.?Here are his three reasons for why ethereum's future looks bright.

5.?Oil prices extended a wining streak on OPEC+'s decision.?Oil also found strength from the US Energy Information Administration's report showing weekly crude stockpiles fell by 1.4 billion barrels,?confounding expectations for an inventory increase .

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This newsletter was curated by Hallam Bullock.