OPEC+ Move Bad For Global Growth Outlook: US Treasury Secretary Janet Yellen

According to the report, Yellen said a reduction in gasoline prices from last year's peaks had helped limit inflation and it would be detrimental if the trend were reversed

Janey Yellen said oil production cut by OPEC+ adds to uncertainty and burdens at a time when inflation is already high. ( Image Source :Getty )

Janet Yellen, the US treasury secretary, on Monday said a surprise OPEC+ oil production cut is an "unconstructive act" that will add uncertainty to the global growth outlook and to burdens on consumers at a time of high inflation, reported by Reuters.

"I think it's a regrettable action that OPEC decided to take," Yellen said, adding it was too early to assess what the price impact would be. "I think it's a very unconstructive act at this time when it's important to try to hold energy prices down."

According to the report, Yellen said a reduction in gasoline prices from last year's peaks had helped limit inflation and it would be detrimental if the trend were reversed.

Oil benchmark prices jumped 6 per cent on Monday, the day after the OPEC+ group jolted markets with plans to cut more production, raising fears of tightening supplies.

"Clearly, it's not a positive for global growth," Yellen said. "And it adds to uncertainty and burdens at a time when inflation is already high".

US President Joe Biden downplayed the impact of the OPEC+ move in a brief comment to reporters on Monday. "It's not going to be as bad as you think," he said as he boarded Air Force One in Minneapolis for the trip back to Washington after touring a factory.

Asked about the impact the OPEC+ production cut would have on the $60 per barrel price cap Western governments have imposed on Russian crude oil, Yellen said she did not see it having any significant impact on the appropriate level of the price cap.

"I see it as working," she said of the price cap, adding that it has led to steep discounts on Russian oil and increased bargaining power for purchasers. She said coalition countries could revisit the price cap level if a change was deemed appropriate, "But I don't see that that's appropriate at this time."

"I want to withhold judgment now on just what impact this will have on oil prices, although I know there's been some reaction today," she said of the OPEC+ move.