The relationship between the United States and the Kingdom of Saudi Arabia has been at its lowest point in a decade over the past month.US policymakers are urging President Joe Biden’s administration to reevaluate America’s relationship with its longtime ally in the Middle East following the shocking decision by the Organization of Petroleum Exporting Countries, of which Saudi Arabia is a member, to cut oil production by two million barrels per day. (OPEC oil nations agree)
The decision of OPEC, according to critics, will raise oil prices at a time when consumers in the United States are already feeling the effects of high energy costs. Russia’s struggling economy will also benefit significantly from an increase in oil prices.
In light of the Biden administration’s efforts to re-engage with Saudi Arabia and its de facto ruler Mohammed bin Salman, the decision has sparked tangible anger in Washington. Long-term effects of this latest deterioration on America’s strategic interests around the world are unknown.
The relationship between the US and Saudi Arabia has been turbulent for a long time. In spite of conflicts over English ordered Palestine and the foundation of Israel in 1948, the US and Saudi Arabia concurred that as a trade-off for admittance to huge Saudi oil holds, Washington would give security certifications to Riyadh. When Iran’s overthrow of Mohammad Reza Shah resulted in the loss of another significant US ally in the Middle East, the relationship grew stronger. In 1991, US troops were stationed for the first time in Saudi Arabia, establishing a now-permanent presence within the largest and most significant player in the Arabian Gulf.
However, Riyadh’s restriction of women’s and minority rights, as well as the regime’s strict interpretation of Wahabi Islam and repression of democratic norms, have strained the relationship. (OPEC oil nations agree)
Saudi Arabia, on the other hand, has suffered a significant loss of prestige and is working to repair its reputation on a global scale and strengthen its ties to the United States. Lobbyists backed by Saudi Arabia have spent millions of dollars trying to reshape the relationship in Washington. Biden responded by going to Saudi Arabia, presumably as a show of goodwill and to try to get back on track.
However, the decision made by OPEC has damaged any existing trust. Bin Salman probably made a bad strategic decision by doing it.Any changes in oil production will have an effect on the midterm elections next week, which are taking place as fuel prices soar and inflation reaches double digits in the US. Saudi Arabia has been pushing for Republican victories in the midterm elections, which has led to suggestions that the OPEC decision is a form of electoral interference. The fact that the price of oil will probably make it easier for Russian President Vladimir Putin to continue funding his war of aggression against Ukraine will only make the OPEC decision in Washington taste even worse.
The demands made by Democrat Richard Blumenthal, who sits on the Senate Armed Services Committee, and fellow Democrat Bob Menendez, who is the chair of the Senate Foreign Relations Committee, for an immediate halt to arms transfers to Saudi Arabia are one indication of Washington’s outrage over the OPEC decision. The “No Oil Producing and Export Cartels” (NOPEC) bill, which would amend US antitrust laws to revoke sovereign immunity from OPEC members and their national oil companies, is also receiving increasing bipartisan support following the OPEC decision. Biden officials have also thought about using US businesses as leverage by reducing US investment in Saudi Arabia, which puts pressure on the kingdom without jeopardizing Middle Eastern security concerns. (OPEC oil nations agree)
Retaliatory actions taken by either side will have long-lasting effects at this crucial time in US–Saudi relations. Saudi Arabia has strengthened its strategic partnership with China, joining a growing number of powerful authoritarian nations. Saudi Arabia is seeking Chinese financing for its ambitious NEOM project near the Red Sea, and Beijing is using Riyadh as a key partner in its Belt and Road Initiative.
Due to the EU embargo and G7 cap, the Saudis have indicated that they may resume oil production in December. However, US policymakers are skeptical that the Saudis will keep their word. December will be a crucial test for the relationship’s future.
The US runs the risk of losing one of its largest arms markets if the relationship cannot be reset. There are a lot of US congressional districts that rely on the production of these weapons, and it won’t be easy to find a country that can meet Saudi Arabia’s demand for US weapons. It’s likewise not possible for the US to totally decouple from Saudi Arabia given the degree of Saudi interest in the US, as well as exchange. As a strategic counterweight to Iran, Saudi Arabia is critical in the Middle East.
However, Saudi Arabia also requires the US. China’s military might is growing, but it can’t guarantee Riyadh’s safety like Washington can. It may be necessary to establish a relationship that is more balanced and practical.
Although US policymakers have a long memory, the OPEC decision to reduce oil production will eventually be altered. Saudi Arabia refused to assist the United States in times of need. Saudi Arabia’s dependability as a strategic counterweight to Iranian power and as an ally in the Middle East will cause the United States to pause.
Numerous nations support the OPEC decision to cut oil production despite the desolate state of the US.
In response to American criticism of the Saudi-led OPEC+ group’s recent decision to reduce oil output by two million barrels per day as of November, Kuwait, Jordan, Pakistan, and Djibouti have expressed their full support for Saudi Arabia.
The OPEC+ decision, according to a statement released yesterday by the Kuwaiti Ministry of Foreign Affairs, was “purely economic” and based on supply and demand in global markets.
The ministry emphasized that the reduction in output serves the interests of producers and consumers alike and aims to shield markets from fluctuations.
All of the countries that are a part of OPEC+ came to the same conclusion.
According to the statement, “Kuwait stands in full and comprehensive solidarity with Saudi Arabia over the recent statements, which took the decision out of its purely economic framework.”
Sinan Al-Majali, the Jordanian spokesman for the Foreign Ministry, stated that output decisions are “a technical issue related to market stability and requirements, and the protection of producers’ and consumers’ interests.” He also stated that such decisions must be approached on technical grounds and in their economic context, away from political disagreements that do not serve common goals and interests.
“Address this issue through direct and balanced dialogue between Riyadh and Washington, and within the spirit of partnership that unites the two countries,” Al-Majali emphasized.
He went on to say that Jordan backs Riyadh in its efforts to safeguard its interests, stability, and security.
Pakistan and Djibouti, on the other hand, have expressed solidarity with Saudi Arabia regarding the OPEC+ decision.
In response to accusations from the United States that Riyadh is siding with Russia in its war on Ukraine, the kingdom received assistance from the OPEC group, Egypt, Morocco, and Algeria on Monday.
This has been refuted by Riyadh, which claims that the choice was solely “economic.”
Sheikh Hamad Bin Jassim Bin Jaber Al-Thani, a former Qatari Prime Minister, has stated: The cost of a barrel of oil ought to have been more than $250 at this point if we somehow managed to represent expansion,” taking note of that the creating nations have powerful claims to answer those griping about high energy costs.
On Friday, Bin Jassim made the following series of tweets on his Twitter account: While some individuals are shouting and blaming various things for the rise in energy costs, our producing nations have numerous persuasive arguments with which they can respond to those who accuse them.”
Added Bin Jassim: Those who shout forget that their nations impose hefty taxes on energy derivatives and do not even discuss lowering or raising these taxes for their citizens. They do not consider the tragedies and financial difficulties that the producing nations experienced as a result of the decline in energy prices.”
The prices of the majority of global commodities have increased multiple times over the past three decades. For instance, when an ounce of gold was sold for $250, its price has doubled eight times since then, reaching nearly $2,000 today.
“Added he: They claim that this is the cycle of market economics and that we do not interfere with its movement when producing nations complain. If we were to calculate annual inflation of only 2%, we would find that the price of a barrel of oil should have reached more than $250 in the 1960s.
To support falling crude prices, the OPEC+ alliance, which consists of the 13 OPEC member nations led by Saudi Arabia and its ten partners led by Russia, decided earlier this month to reduce oil production quotas.
The largest reduction that the organization has made since the height of the global pandemic in 2020 is the one that OPEC+ and its allies have announced. (OPEC oil nations agree)
Oil prices increased as a result of the OPEC+ decision, and expectations of an increase in prices led to the cost of a barrel exceeding $90. The US criticized the move and said that Saudi Arabia was supporting Russia’s war in Ukraine and siding with Russia, which Riyadh denied.
After the OPEC+ decision to reduce oil production, Turkish Foreign Minister Mevlut Cavusoglu stated that his country cannot accept US threats to Saudi Arabia.
Cavusoglu made the announcement, as reported, in a statement: We are witnessing a nation’s bullying of Saudi Arabia, which is not true.”
He added, “The problem threatening Saudi Arabia will not solve the problem. Iranian oil is also subject to an embargo. Lift sanctions if you want oil prices to drop.”
The decision to reduce oil production made by OPEC+ was defended by Arab nations as well as international and Arab organizations. Additionally, these nations declared their support for Riyadh’s position.
After the OPEC+ alliance, led by Riyadh and Moscow, decided last week to reduce raw oil production, US accusations against Saudi Arabia for supporting Russia in its war on Ukraine have grown recently. (OPEC oil nations agree)
The Saudi Foreign Ministry denied the accusations made by the United States, stressing that it does not respond to “dictation,” while the United States viewed the decision made by OPEC+ on Wednesday as biased in favor of Russia in its war on Ukraine.
The Egyptian Foreign Ministry announced yesterday that Egypt supports Saudi Arabia’s decision to reduce oil production as part of the OPEC+ group.
The ministry released a statement that stated, “Egypt endorses the stance expressed by the sisterly Kingdom of Saudi Arabia in explaining the technical considerations for the OPEC+ decision as it aims to maintain oil market discipline in the first place.”
It added that the Saudi choice points “to accomplish an equilibrium in the oil market to manage the ongoing financial difficulties.”
Since the choice recently by the Saudi-drove Association of the Oil Trading Nations (OPEC+) to cut the creation and result of unrefined petroleum by a sum equivalent to around two percent of the worldwide stock, the US has blamed the realm for favoring Russia in its attack of Ukraine.