Wednesday, October 12, 2022

Saudi Arabia Defied U.S. Warnings Ahead of OPEC+ Production Cut

The Saudis apparently coordinating a cut in production in both countries, at a time when the global economy needs the opposite.

At the Wall Street Journal, "Riyadh dismissed American officials who said the output reduction would be perceived as siding with Russia, in a new blow to relations":

RIYADH, Saudi Arabia—Days before a major oil-production cut by OPEC and its Russia-led allies, U.S. officials called their counterparts in Saudi Arabia and other big Gulf producers with an urgent appeal—delay the decision for another month, according to people familiar with the talks. The answer: a resounding no.

U.S. officials warned Saudi leaders that a 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, the people said.

Saudi officials dismissed the requests, which they viewed as a political gambit by the Biden administration to avoid bad news ahead of the U.S. midterm elections, on which control of Congress hangs. High gas prices and inflation have been central issues in the campaign.

Instead, the people said, the kingdom leaned on its OPEC allies to approve the cut, which is aimed at reducing production by 2 million barrels a day.

Adrienne Watson, a National Security Council spokeswoman, rejected Saudi contentions that the Biden administration efforts were driven by political calculations. U.S. officials questioned a Saudi analysis that the price of oil was about to plunge and urged them to wait and see how the market reacted. If the price did collapse, U.S. officials told their Saudi counterparts, OPEC+ could react whenever they needed.

“It’s categorically false to connect this to U.S. elections,” Ms. Watson said. “It’s about the impact of this shortsighted decision to the global economy.”

Since the OPEC+ decision, the White House vowed to fight OPEC’s control of the energy market. Lawmakers from across the political spectrum called on the U.S. to cut off arms sales to Saudi Arabia. And U.S. officials started looking for ways to punish Riyadh.

In one of its first responses, U.S. officials said, the Biden administration is weighing whether to withdraw from participation in Saudi Arabia’s flagship Future Investment Initiative investment forum later this month. According to people familiar with the matter, the U.S. has pulled out of a working group meeting on regional defenses next week at the Gulf Cooperation Council, based in Saudi Arabia.

Mr. Biden’s visit to Saudi Arabia in July was meant to repair relations after the president entered office with a vow to treat the kingdom as a pariah over human rights, particularly the 2018 killing of Saudi journalist Jamal Khashoggi at the hands of Saudi agents.

Images of the president’s fist bump with Crown Prince Mohammed bin Salman became a polarizing symbol of the trip.

But according to people inside the Saudi government, Mr. Biden’s July visit did little to change Prince Mohammed’s determination to chart a foreign policy independent of U.S. influence, in a break from almost 80 years of American-Saudi partnership.

If anything, said the people inside the Saudi government, the visit angered Prince Mohammed, who was upset that Mr. Biden went public with his private comments to the Saudi royal over Mr. Khashoggi’s death, which prompted Saudi officials to publicly contradict Mr. Biden’s characterization of their interaction.

U.S. officials said they saw no indications in their talks with Saudi leaders in recent months that Mr. Biden’s comments about Mr. Khashoggi had been damaging to ties...