Rift between US and Saudi for OPEC+ Oil Output Cut

Washington: The OPEC+ organization’s decision this week to cut oil production regardless of stiff U.S. opposition has further strained already tense relations between President Joe Biden’s White House and Saudi Arabia’s royal family, once one of Washington’s staunchest Middle East allies, as per interviews with around twelve government officials and experts in Washington and the Gulf.

The White House pushed hard to forestall the OPEC output cut, these sources said. Biden desires to keep U.S. gasoline prices from spiking again ahead of midterm elections in which his Democratic party is attempting to maintain control of the U.S. Congress. Washington also wants to restrict Russia’s energy revenue during the Ukraine war.

The U.S. administration campaigned for OPEC+ for weeks. In recent days, senior U.S. officials from energy, foreign policy, and economic teams asked their foreign counterparts to vote against an output cut, as per the sources.

Amos Hochstein, Biden’s top energy envoy, alongside national security official Brett McGurk and the administration’s special envoy to Yemen Tim Lenderking, went to Saudi Arabia last month to discuss energy issues, including the OPEC+ decision. They failed to forestall an output cut, just as Biden did after his own July visit.

That argument failed, the source said, adding that the Saudis said that assuming the US needed more oil in the business sectors, it ought to begin producing more of its own. The U.S. is the world’s No. 1 oil producer and also its top purchaser, according to data from the U.S. Energy Information Administration.

Washington’s handling of the Iran nuclear deal and withdrawal of support for a Saudi-led alliance’s offensive military operations in Yemen have upset Saudi officials, as have actions against Russia after the February 2022 invasion of Ukraine.

A U.S. push for a cost cap on Russian oil is causing uncertainty, Energy Minister Prince Abdulaziz bin Salman told Bloomberg TV after the OPEC cut, noting the “lack of details and the lack of clarity” about how it will be implemented.

A sale directed by Biden of 180 million barrels of oil in March from the U.S. Strategic Petroleum Reserve put downward pressure on oil costs. In March, OPEC+ said it would stop using data from the International Energy Agency (IEA), a Western oil watchdog, due to Saudi-led concerns the United States had too much influence.

“Look it’s clear that OPEC Plus is aligning with Russia,” White House press secretary Karine Jean-Pierre said on Wednesday. She would not elaborate on how the output cut would affect U.S.-Saudi relations. In the U.S. Congress, Biden’s Democrats called for the withdrawal of U.S. troops from Saudi Arabia and spoke about taking back weapons.

“I thought the whole point of selling arms to the Gulf States despite their human rights abuses, nonsensical Yemen War, working against US interests in Libya, Sudan, etc, was that when an international crisis came, the Gulf could choose America over Russia/China,” Senator Chris Murphy, a Democrat, said on Twitter.

Saudi minister of state for foreign affairs Adel Al-Jubeir, said in remarks to Fox News on Friday when asked about the U.S. criticism: “Saudi Arabia does not politicize oil or oil decisions.”

“With due respect, the reason you have high prices in the United States is that you have a refining shortage that has been in existence for more than 20 years,” he added.