The Saudis say the US has sought to delay OPEC+ production cuts for a month

Dubai, United Arab Emirates (AFP) – Saudi Arabia said on Thursday that the United States had urged it to delay a decision by OPEC and its allies – including Russia – to cut oil production for a month. This delay could have helped reduce the risks of higher gas prices ahead of next month’s US midterm elections.

A statement from the Saudi Foreign Ministry did not specifically mention the November 8 elections in which US President Joe Biden is trying to maintain his narrow Democratic majority in Congress. However, it was reported that the US “suggested” delaying the cuts for a month. In the end, OPEC announced the cuts at its October 5th meeting in Vienna.

Postponing the cuts will likely delay any rise in gas prices until after the election.

Higher oil prices – and thus higher gasoline prices – have been a major driver of inflation in the US and around the world, exacerbating global economic woes as Russia’s months-long war on Ukraine disrupts global food supplies. For Biden, creeping gasoline prices could affect voters. He and several lawmakers have warned that America’s longstanding security-based relationship with the kingdom could be reconsidered.

The decision of the Saudi Ministry of Foreign Affairs to publish a rare and lengthy statement showed how tense relations between the two countries are.

The White House backed down on Thursday, rejecting the idea that the requested delay was related to the US election, linking it instead to economic considerations and Russia’s war on Ukraine.

“We have provided Saudi Arabia with an analysis to show that there is no market basis for lowering production targets, and that they can easily wait for the next OPEC meeting to see how things develop,” said John Kirby, strategic communications coordinator for national security. board.

He added: “Other OPEC countries told us secretly that they did not agree with the Saudi decision, but they felt compelled to support the Saudi approach,” without mentioning the countries.

Relations between the United States and Saudi Arabia have been fraught since the 2018 murder and dismemberment of Washington Post columnist Jamal Khashoggi.Which Washington believes was ordered by Saudi Crown Prince Mohammed bin Salman. Meanwhile, high energy prices provide a weapon that Russia can use against the West, which has been arming and supporting Ukraine.

The Saudi Foreign Ministry statement acknowledged that the kingdom was talking with the United States about delaying the OPEC+ cut of two million barrels. announced last week.

The ministry said in its statement, “The Kingdom’s government has made it clear, through its continuous consultation with the American administration, that all economic analyzes indicate that postponing the OPEC + decision for a period of one month, as has been proposed, will have negative economic consequences.” .

The ministry statement confirmed details of Article in the Wall Street Journal This week, which quoted unnamed Saudi officials as saying that the United States had sought to delay the OPEC+ production cut until before the midterm elections. The newspaper quoted Saudi officials describing this move as a political maneuver by Biden before the vote.

The kingdom also criticized attempts to link its decision to Russia’s war on Ukraine.

The Kingdom stressed that while it seeks to maintain the strength of its relations with all friendly countries, it affirms its rejection of any dictates, actions or efforts to distort its noble goals to protect the global economy from the fluctuations of the oil market. . “Resolving economic challenges requires establishing a constructive, depoliticized dialogue, and prudently and rationally considering what serves the interests of all countries.”

Saudi Arabia and the United Arab Emirates, the main OPEC producers, voted in favor of the United Nations General Assembly resolution on Wednesday. To condemn the “attempted illegal annexation of Russia” of four Ukrainian regions and demand their immediate reversal.

In Congress, US Senator Chris Murphy, a Connecticut Democrat who has long been a critic of Saudi Arabia, proposed a new freeze on military aid to the kingdom. He suggested halting the planned transfer of surface-to-air missiles to Riyadh and sending them instead to Ukraine, which has faced a renewed barrage of Russian fire in recent days..

Saudi Arabia has been targeted by the Iran-backed Houthi rebels in Yemen who control that country’s capital amid a long and grinding war in the Arab world’s poorest country. US air defenses were critical in shooting down Houthi-launched drones carrying bombs target the kingdom.

OPEC was once strong enough to stop the US with its oil embargo in the 1970s, and OPEC needed non-members like Russia to push production cuts in 2016 after prices collapsed below $30 a barrel amid rising US production. The 2016 agreement gave birth to the so-called OPEC+, which joined the organization in cutting production to help stimulate prices.

The coronavirus pandemic saw oil prices briefly enter negative territory Before air travel and economic activity rebound after the lockdown around the world. Benchmark Brent crude settled above $92 a barrel early Wednesday, but oil-producing nations are concerned that prices could fall sharply amid efforts to combat inflation.

Biden, who famously called Saudi Arabia a “pariah” during his 2020 election campaign, traveled to the kingdom in July and clashed with Prince Mohammed before a meeting. Despite this spread, the kingdom has been supportive of keeping oil prices high in order to fund Prince Mohammed’s aspirations, including his future $500 billion desert city project called NEOM.

Prince Mohammed and his father, King Salman, hosted former President Donald Trump on his first trip abroad and enjoyed a closer relationship with his administration. However, even Trump lobbied the kingdom over oil production, once telling the audience that King Salman “may not be there” without US military support..

And Biden warned, on Tuesday, of the repercussions of the OPEC + decision on Saudi Arabia.

“There will be some consequences for what they did with Russia,” Biden said. “I won’t go into what I think and what I have in mind. But there will be — there will be consequences.”

___

Associated Press writer Amer Madani in Washington contributed to this report.

___

Follow Jon Gambrell on Twitter at www.twitter.com/jongambrellAP.

Leave a Comment