(Photo credit: DOUG MILLS/The New York Times/Redux)
Days ahead of this month’s OPEC+ meeting, US officials made an “urgent appeal” to Saudi Arabia and other big Gulf producers to delay a major oil-production cut “for another month,” according to US and Saudi sources that spoke with the Wall Street Journal (WSJ).
The report says the answer given by Riyadh to Washington was “a resounding no.”
Saudi officials told the WSJ they viewed the diktat as a “political gambit” by US President Joe Biden, who is working to avoid “bad news” ahead of crucial midterm elections in the US next month.
If Saudi Arabia and the rest of Biden’s Gulf partners had agreed to the one-month delay, the production cut would have come days before the ballots: too late to have a major effect on voters’ wallets.
Furthermore, Saudi Arabia’s decision was made despite warnings by US officials, who said the OPEC+ cut “would be viewed as a clear choice by Riyadh to side with Russia in the Ukraine war and that the move would weaken already-waning support in Washington for the kingdom.”
UAE, Kuwait, Iraq, and Bahrain privately fell in line with Biden’s demands
Last week, OPEC+ – a bloc of oil-producing nations made up of OPEC and non-OPEC member states, including Russia – announced a major oil production cut of two million barrels per day (bpd) to prevent a crash in the energy market.
US officials believed the cut they so feared would not surpass one million bpd, according to the WSJ, which added that the actual size of the cut left many in Washington “blindsided.”
But while Saudi Arabia stood its ground against the White House’s demands, the UAE, Kuwait, Iraq, and Bahrain all reportedly fell in line, opposing the production cut and advocating privately for the one-month delay.
As a result of this, White House officials have been saying since last week that Biden is “reevaluating” his country’s relationship with the kingdom, and is even considering legislation that would lift the sovereign immunity of sovereign states – allowing them to be sued in federal court.
Speaking with CNN on Tuesday night, Biden pledged that “there will be consequences for what [Saudi Arabia has] done, with Russia.”
Saudi Foreign Minister Prince Faisal bin Farhan, meanwhile, told the state-run Al Arabiya TV network on Tuesday that the OPEC+ decision was purely economic and had no political dimensions.
Prince Faisal added that relations with the US are “long standing and strategic” and that military cooperation between the two countries has “contributed to peace and stability in the region.”
MbS unwilling to ‘sacrifice much’ for Biden
According to the sources that spoke with the WSJ, the US has already pulled out of a working group meeting on regional defenses next week at the Saudi-based Gulf Cooperation Council, and officials are weighing whether to withdraw from Saudi Arabia’s flagship Future Investment Initiative investment forum later this month.
Biden has spent the better part of this year trying to convince Washington’s long-time partners in the Gulf to boost oil production levels and break with their OPEC+ commitments, in hopes of slowing down a fuel supply crisis that stems from western sanctions on Russia’s energy sector.
The US president even broke with his campaign promises and made an ill-fated trip to Saudi Arabia in July to meet with Crown Prince Mohammed bin Salman (MbS), the man his government accused of being responsible for the torture and dismemberment of journalist Jamal Khashoggi.
This visit reportedly did little to fix the relationship between the two nations, as MbS told his advisers he “isn’t willing to sacrifice much for Biden.”
MbS – who was recently named prime minister to avoid US prosecution for the Khashoggi murder – has tried to maximize Saudi Arabia’s economic strength over recent years. Thanks to high energy prices, the kingdom’s economic growth this year is estimated at more than 10 percent by the International Monetary Fund (IMF).
As a result of this growth, and the kingdom’s burgeoning economic ties with Moscow, the crown prince was able to shoot down an offer by Washington to buy Saudi oil on the market to replenish the US strategic petroleum stockpiles in exchange for the one-month delay, and if the price of Brent crude fell to $75 per barrel.