US and Saudi officials exchange views over OPEC cuts, testing longstanding relationship

An escalating feud between the United States and Saudi Arabia broke out on Thursday over President Biden’s accusations that the Saudi-sanctioned global oil production cuts were a gift to Russian President Vladimir Putin and a response from oil. It got even hotter. A rich kingdom that cannot be bullied.

Analysts said the rare public animosity would not further deepen US-Saudi security, economic and diplomatic ties, but Riyadh officials outspokenly denied Mr. ‘s primaries were concerned about his short-term political gains and the price of a gallon of gasoline ahead of the November 8 midterm elections.

The White House, members of the Capitol and private market analysts say the planned cuts announced last week by the Saudi-led ‘OPEC+’ producer cartel — equivalent to 2 million barrels a day — would make Mr Putin desperate. He said it would effectively give him the extra income he needed to fund his war in Ukraine. Declining production means higher prices for Russian gas exports, putting new upward pressure on the politically sensitive price Americans pay for his gallons of gas.

OPEC’s decision flew in the face of Mr. Biden’s veiled public pleas and private lobbying of Saudi Arabia to keep production going. Biden announced on Wednesday that his administration would reassess bilateral ties, and key Democrats on the Capitol said U.S. aid and arms sales to Riyadh would be curtailed or cut off entirely. said it could be done.

“There will be consequences for what they do,” Biden told CNN.

Saudi Arabia said the reasons for the production cut were purely economic, vehemently denying US accusations of siding with Russia and upping the stakes.

The Saudi foreign ministry said in a statement to Twitter on Thursday that the kingdom “rejects any order” and that Riyadh acted to “protect the global economy from oil market volatility.”

“The Royal Government of Saudi Arabia confirms that any attempt to distort the facts regarding the Kingdom’s position on the crisis in Ukraine is unfortunate and does not change the Kingdom’s principled position,” the statement continued.

The Saudi statement also revealed that the White House had asked to “delay” the announcement of the production cuts by a month. This would delay market reaction past the U.S. midterm vote.Biden’s national security spokesman John Kirby said the reaction was almost immediate, outspokenly disputing the Saudi narrative. Indicated.

“The Saudi Ministry of Foreign Affairs may try to twist and turn, but the facts are simple,” Kirby said. He said other producers in OPEC+ were prepared to unofficially delay the announcement, but he “felt compelled to support the Saudi direction.”

The Saudi statement is a pressing political headache for Biden and a new opportunity for Republicans.

Rep. Thomas Tiffany, a Wisconsin Republican and member of the House Natural Resources Committee, called for a congressional inquiry into whether politics played a role in Mr. Biden’s recent oil diplomacy.

“These are very serious allegations, and if the Biden administration actually cooperates with a foreign government to influence the election in the United States, it is something the American public deserves to know,” Tiffany said. .[Democratic House Speaker Nancy] Pelosi and Congress have a responsibility to get the truth out of these very disturbing reports as soon as possible. ”

Kirby has denied any political involvement in the US complaint against Riyadh. He said the administration has presented Saudi Arabia with “analysis that shows it does not have the market base to cut its production targets” and will wait until OPEC’s next meeting scheduled for early December before making any cuts. He said he had proposed to “see how the situation develops”.

Kirby said in a statement that “the world stands with Ukraine to counter Russian aggression.” “The United States has played a key role in bringing this coalition together and has engaged Saudi Arabia’s leaders in that effort.”

He said Saudi decision-makers knew the cuts would “increase Russian revenues and blunt the effectiveness of sanctions.”

Biden said after an internal review of already strained Saudi relations after the killing of US-based dissident journalist Jamal Khashoggi in Turkey by a top Saudi government hit team in 2018. , without mentioning how specific things could change. About 70,000 Americans work in Saudi Arabia, where the United States is a major arms supplier and Saudi Arabia is seen as a bulwark in the Gulf Arab alliance with the United States to contain regional rival Iran.

Oil production cuts will benefit Putin, but Saudi Arabia this week sided with the United States in a UN General Assembly vote condemning Russia’s recent land grab in Ukraine, despite ferocious lobbying by the Kremlin.

“As the president said, we are re-evaluating our relationship with Saudi Arabia in the light of these actions and will continue to look for signs as to where they stand in the fight against Russian aggression.” Kirby said.

cooperation and tension

US relations with Riyadh have long been a mixture of cooperation and tension. His Khashoggi’s death in 2018 strained relations, and Mr. Biden as a 2020 presidential candidate famously promised to make the kingdom a “pariah.”

Saudi Arabia has also felt some friction in its relationship as the United States has surpassed it as the world’s largest energy producer, with Senate Foreign Relations Committee chairman Robert Menendez and New Jersey Democrat Robert Menendez among others on the Capitol floor. A powerful voice in the Alliance questioned the bilateral interests the United States is gaining.

OPEC’s latest move amounts to a firm “declaration of independence” by the Kingdom, said Gerald M. Fierstein, Arabian Peninsula director at the Middle East Institute.

“What the OPEC+ decision makes clear is that the impact of Saudi decisions on US national interests is, at best, one of many factors for Saudi leaders, not decisive.” “This decision is unlikely to have a significant impact on the relationship in the short term, but it could cement the transactional nature of the bilateral relationship.”

Mr. Biden faced strong backlash for his July visit to Saudi Arabia for Crown Prince Mohammed bin Salman. Washington has been very ambivalent about the hard-line crown prince’s decision to intervene in Yemen’s civil war against the Iran-backed Houthi rebels, and the conflict in the region’s poorest country has led aid groups to face the world’s worst humanitarian crisis. It is said to be one of

But the president willingly endured criticism for increasing supplies of oil, prompting Saudi Arabia to increase production by about 750,000 barrels a day as the war in Ukraine and sanctions against Russia roiled markets.

At the time of our visit, the average price of gasoline in the US was $4.52 per gallon, according to AAA. Pump prices have fallen steadily in recent months after hitting a record average of $5.01 a gallon in June.

But OPEC’s announcement undermines Mr. Biden’s goodwill among voters.

The president defended the visit last week after OPEC’s announcement, telling reporters the visit was “not inherently about oil”, but this week he reassessed the relationship between the United States and the Kingdom. I promised.

Kirby told reporters on Tuesday that the president questioned whether the relationship with the oil-rich kingdom was “where it should be” and whether it “serves national security interests”. He said he does.

Hill Democrats like Menendez are much more outspoken. In a lengthy statement this week, he sharply criticized Saudi Arabia’s production cuts, saying the cuts were a gift to Mr Putin and pledging to block “any cooperation with Riyadh until the kingdom reassesss its position”. did.

“There is room to play both sides of this conflict, either supporting the rest of the free world trying to stop a war criminal from violently wiping an entire country off the map, or supporting him. Not at all,” said the New Jersey Democrat. “The Kingdom of Saudi Arabia chose the latter in a terrible decision driven by economic self-interest.”

“The United States must immediately freeze all aspects of cooperation with Saudi Arabia, including arms sales and security cooperation beyond what is absolutely necessary to protect U.S. personnel and interests,” he said. added.

As the White House announced the review on Tuesday, Connecticut Senator Richard Blumenthal and California Rep. Lo Khanna introduced legislation to immediately halt all US arms sales to Saudi Arabia for a year. did. This suspension will also stop sales of spare and repair parts, support services and logistics support.

Saudi Arabia has been an important customer of US arms sales. So far, the administration has informed Congress of her more than $4 billion worth of weapons to Saudi Arabia, according to the Washington-based Arms Trade Forum. Riyadh’s arsenal, including 300 Patriot missiles.