Abdulaziz bin Salman, Saudi Arabia’s Energy Minister, speaks during a press conference after the 45th Joint Committee of Ministers Oversight and the 33rd OPEC and Non-OPEC Ministers Meeting in Vienna, Austria, on May 5. ten.
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Abdulaziz bin Salman, Saudi Arabia’s Energy Minister, speaks during a press conference after the 45th Joint Committee of Ministers Oversight and the 33rd OPEC and Non-OPEC Ministers Meeting in Vienna, Austria, on May 5. ten.
Vladimir Simicek / AFP via Getty Images
The Biden administration is weighing retaliatory action against longtime ally Saudi Arabia after the kingdom sided with Russia in cutting oil production.
President Biden told CNN on Tuesday there will be “consequences” for Saudi Arabia after OPEC + group of oil producing countries announced last week Reduce 2 million barrels per day in oil production.
Biden declined to elaborate on the action he is considering.
A dramatic cut in the amount of oil on the market could send fuel prices up in a volatile year.
The OPEC+ decision to be led by Saudi Arabia has created a serious rift in US-Saudi relations, which have seen their ups and downs over the past seven decades.
“This move will obviously severely strain the already bad relationship between the US and Saudi Arabia and provoke a sizable backlash against both. either side of the aisle in Washington, DC,” Jason Bordoff, director of Columbia University’s Center for Global Energy Policy.
Saudi Arabia’s foreign ministry issued a statement on Wednesday night rejecting accusations that the oil supply cuts were “politically motivated against the United States” or that Saudi Arabia was “taking sides” in a international conflict – seemingly alluding to Russia’s invasion of Ukraine.
It said the decision on oil “was purely based on economic considerations” and that the US-Saudi relationship “serves the common interests of both countries.”
Biden lobbies against oil supply cuts
President Biden speaks to reporters before boarding Marine One on the South Lawn of the White House on Wednesday.
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President Biden speaks to reporters before boarding Marine One on the South Lawn of the White House on Wednesday.
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It’s not just the sheer size of the OPEC+ oil production cuts. It’s also the timing – coming less than three months after Biden visited Saudi Arabia to lobby against such a drop, and just before the US midterm elections, where gas pump prices could drop. affect voters.
“It feels like punishment against the Biden administration,” said Jonathan Panikoff, a Middle East security expert at the Atlantic Council and a former US intelligence analyst on the region.
“I think it’s hard to think of it differently because Saudi Arabia is not naive about the US political situation,” Panikoff said. “That might not be the core reason to do it, but they’re perfectly happy doing it.”
Saudi Arabia braced for weaker fuel demand
Firas Maksad, senior fellow at the Middle East Institute, a D.C.-based think tank, said that Saudi Arabia has a legitimate business reason for the cuts. Its look for higher fuel prices now in case a global recession reduces demand later.
This week, OPEC – short for Organization of the Petroleum Exporting Countries – lower its forecast for crude oil demand in the coming months due to global inflation, soaring interest rates and geopolitical tensions.
Maksad said that US officials had engaged in a “court press” with their counterparts in the Gulf ahead of the October 5 OPEC+ meeting. He said there was an understanding of what The US government is pressuring members of the oil corporation to do so.
“Just the will to accept US domestic policy – the administration’s domestic political considerations – is not there,” he said.
Russia benefits from a seat at the table
Russian Deputy Prime Minister Alexander Novak arrives to attend the 45th Joint Ministerial Monitoring Committee and 33rd OPEC and Non-OPEC Ministerial Conference in Vienna on October 5.
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Russian Deputy Prime Minister Alexander Novak arrives to attend the 45th Joint Ministerial Monitoring Committee and 33rd OPEC and Non-OPEC Ministerial Conference in Vienna on October 5.
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It is one thing for US partner Saudi Arabia to lead the drive to cut output. Russian Deputy Prime Minister Alexander Novak, who is under US sanctions, sat at the table when the cuts were announced. Saudi Arabia and Russia co-chair OPEC+.
The United States and many of its allies are trying to cut Russia’s oil and gas exports, which help support the country’s economy. Cutting oil production would raise prices per barrel and draw more revenue into the Kremlin’s coffers to help pay for the war in Ukraine. Saudi Arabia’s decision to join Russia in production cuts is seen as undermining US efforts to curb Russia’s oil income.
“Many in DC see Saudi Arabia as aligning with Russia at a time when the Russian military is killing Ukrainians and declining Russian energy exports are plunging much of the world into crisis,” Bordoff said. energy”.
Democrats in Congress are calling on Biden to take tough measures against Saudi Arabia. That includes introduced legislation by Representative Ro Khanna of California and Senator Richard Blumenthal of Connecticut to stop arms sales to the kingdom. And Chairman of the Senate Foreign Relations Committee say that the United States should “freeze all aspects of our cooperation with Saudi Arabia.”
But Panikoff of the Atlantic Council says freezing arms sales to Saudi Arabia may not be the wisest move as it could allow China to fill that void. Instead, he said, the US needs to be “smarter” about its approach to Saudi Arabia.
It returns to the crown prince
Panikoff said that the OPEC+ decision was vested with the kingdom’s de facto leader, Crown Prince Mohammed bin Salman.
“I don’t think we’ve fully accepted the notion that he’s a different leader from what we’re used to. And so we’re going to have to have a different relationship,” he said. speak.
President Biden and Saudi Crown Prince Mohammed bin Salman (far right) attend the Jeddah Security and Development Summit (GCC+3) at a hotel in the coastal city of Jeddah on the Arabian Red Sea Saudi Arabia on July 16.
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President Biden and Saudi Crown Prince Mohammed bin Salman (far right) attend the Jeddah Security and Development Summit (GCC+3) at a hotel in the coastal city of Jeddah on the Arabian Red Sea Saudi Arabia on July 16.
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Panikoff explained that the crown prince is a transactional leader and the US will have to decide if it wants to spend time and energy rebuilding its strategic relationship with the kingdom or become more transactional. Panikoff said that could affect Saudi Arabia’s security guarantees.
“Maybe we don’t sell more advanced planes,” he said. “Maybe we take off some of the Patriot batteries and say, ‘Look, we recognize your security, we’re not trying to degrade it. … We also have to balance the goals. your privacy’.”
Panikoff believes that the crown prince’s decision to tie himself to Putin with the OPEC+ decision was a step in the wrong direction.
But Maksad, with the Middle East Institute, says the Gulf region no longer belongs to the US and has the right to seek other options.
“And so they are building bridges with China, which accounts for more than a quarter of oil exports from Saudi Arabia, and also with Russia, which has been expanding its role,” he said. in the Middle East. . “
