The Biden administration has warned of retaliation for last week’s significant oil production cut by Saudi Arabia-led OPEC and its Russia-led partners, escalating Washington’s dispute with a major Middle Eastern ally.
In an overnight statement, Saudi Arabia refuted U.S. claims that it had taken Russia’s side in the Ukraine conflict and reaffirmed that OPEC+’s decision to reduce production was driven only by economic factors.
The Saudi Foreign Ministry stated, The Kingdom reaffirms its rejection of any dictation, acts, or efforts to distort its lofty intentions to shield the world economy from oil-market instability while preserving the strength of its connections with all friendly countries.
Hours later, the White House accused Riyadh of disguising the geopolitical ramifications of its oil policy with spin and deflection. According to John Kirby, spokesperson for the National Security Council, the Saudis have recently informed us of their plan to restrict oil output, enhancing Russian income and reducing the impact of sanctions.
Mr. Kirby stated that the administration had provided the Saudis with an analysis indicating that they could easily wait until the November conference of the Organization of the Petroleum Exporting Countries before deciding on production restrictions. He claimed that other OPEC members have quietly disagreed with Riyadh’s choice but felt compelled to back it.
U.S. and regional officials claim that the United Arab Emirates, Kuwait, Iraq, and Bahrain secretly opposed the output decrease but eventually supported maintaining alliance unity. According to the Saudi statement, the conclusions of the OPEC+ conference were based on consensus among member nations and not a unilateral choice by a single nation.
President Biden cautioned in an interview with CNN on Tuesday that there will be consequences for what they’ve done with Russia, without elaborating. Less than three months after the President visited the country to strengthen relations, Mr. Kirby stated that the administration was reevaluating the U.S.’s relationship with Riyadh.
Since the OPEC+ move, politicians from across the political spectrum in the United States have urged the administration to explore a variety of steps, including halting arms supplies and adopting legislation allowing OPEC members to be sued under antitrust laws.
The speed and intensity of Washington’s response to the OPEC+ decision appear to have surprised Riyadh, which has rejected U.S. requests to pump more crude for more than a year and relies on oil revenues to fund an economic transformation plan that includes trillions of dollars in development projects.
According to U.S. officials, the OPEC+ decision was detrimental because inflation caused by high oil prices undermines the global economy and provides an economic weapon for Vladimir Putin against the West. It threatens to increase American gasoline prices before the midterm elections on November 8, which will determine control of Congress. High gas costs and inflation have been major campaign topics.
The Wall Street Journal claimed that days before the October 5 OPEC+ decision, U.S. officials urged for a one-month postponement and told Saudi leaders that a cut would be perceived as a clear choice by Riyadh to stand with Moscow in the Ukraine conflict. U.S. officials questioned a Saudi prediction that the price of oil would soon plummet and advised the Saudis to observe the market’s response. U.S. officials assured their Saudi colleagues that OPEC+ could react whenever necessary if the price collapsed.
In a statement released overnight, Riyadh stated that it had informed the White House that the desired one-month postponement would have significant economic effects. U.S. officials have stated that the number of American personnel stationed in Saudi Arabia would not alter much, but some parts of the countries’ longstanding defense cooperation might be impacted.