Some Biden administration officials have bristled at the OPEC Plus cartel’s declared cut, seeing it as a direct affront to the president who threatens to hurt Democrats’ standing in the 2022 midterm elections because it will drive up gasoline prices.
US officials must now consider how to respond to a possible price spike that could help fund Russia’s war in Ukraine, worsen key challenges facing the US and European economies and give Republicans a powerful new argument over the ‘inflation.
OPEC and its allies decide to cut oil production, prompting a fiery response from the White House
A White House official called OPEC’s decision a “disaster.” Another said administration officials viewed the move as a deliberate provocation aimed at boosting Republicans’ chances so close to the election. Other officials said they did not interpret the Saudi move as malicious, but viewed it as a short-sighted effort to maximize oil profits despite the economic and geopolitical consequences.
Biden said Thursday that the cartel’s decision did not undermine the purpose of his July visit, but it was still disappointing. “The trip was not primarily for the oil. The trip was about the Middle East and about Israel and rationalizing positions,” he told reporters. “But it’s a disappointment.”
National Security Council spokeswoman Adrienne Watson said Biden’s advisers all agreed to the trip over the summer. “There was consensus within the President’s national security team on the importance of this trip to advancing the national security interests of the United States,” she said in a statement.
But that has not appeased criticism of the Saudi government.
“They’re spitting in Joe Biden’s face,” said Dean Baker, a White House ally and economist at the Center for Economic and Policy Research, a left-leaning think tank. “Whoever thought this trip was a good idea has some explaining to do.”
Even before Biden flew to the Middle East in July and punched Saudi Crown Prince Mohammed bin Salman, the country’s de facto leader, White House aides knew the trip would draw criticism. Biden had said human rights would be at the “center” of his foreign policy, and he said he would make the oil-rich monarchy a “pariah”. But the president also remained keenly aware of the burden that soaring gasoline prices were placing on middle-class Americans.
Biden’s top aides on the Middle East and energy, Brett McGurk and Amos Hochstein, pushed for the trip as a way to strengthen the relationship and improve Washington’s ability to project influence in the Middle East. at a time when oil-rich states were exploring ties with Moscow. and Beijing, according to US officials and congressional aides, who spoke on condition of anonymity to discuss US policy.
Administration officials had long been sharply divided over how to deal with the oil-rich autocracy. Proponents of a cool approach have cited Saudi Arabia’s unpopular war in Yemen, Riyadh’s poor human rights record and the murder of Washington Post columnist Jamal Khashoggi as reasons to revisit the relationship.
Biden travels to Saudi Arabia amid discomfort and criticism
Many officials in senior positions at the State Department and the U.S. Agency for International Development also said they felt they had room to manoeuvre, given the United States’ growth as an energy superpower. oil producer. The creation of a clean break from former President Donald Trump’s remarkably close relationship with the kingdom also had broad appeal among Biden’s political appointees.
Some US officials said concerns about the Saudi trip were shared by Secretary of State Antony Blinken, even though the top diplomat ultimately supported and participated in the visit.
“Secretary Blinken has fully supported the administration’s engagement with our regional partners on the multiplicity of interests we have,” State Department spokesman Ned Price said.
McGurk and Hochstein’s support for the trip began to win favor with the White House in September 2021, as the price of oil rose and resentment in the Gulf led the United Arab Emirates and Saudi Arabia to push back on demands. U.S. repeated attempts to increase oil production, according to senior officials and congressional aides familiar with the matter. The watershed moment for the push to get closer to the Saudis came when Russia invaded Ukraine on February 24, driving up energy prices and driving up gas costs, already a domestic political responsibility for Biden, in a geopolitical setback.
Some Democrats, already skeptical of U.S.-Saudi relations, seized on the OPEC Plus decision to criticize the trip.
“I think it’s time to basically reassess the U.S. alliance with Saudi Arabia,” Sen. Chris Murphy (D-Conn.), chairman of the Senate Foreign Relations Subcommittee on the Middle East, told CNBC. -East.
A Democratic congressional aide close to administration officials, who like others, spoke on condition of anonymity to discuss US policy, said: “This trip was hotly debated within the administration, and I don’t know how anyone could argue now that it wasn’t a mistake. “
White House officials strongly denied that the purpose of the trip was to boost Saudi oil production. U.S. officials supportive of U.S.-Saudi relations said critics misunderstood the visit’s goals and overestimated Riyadh’s ability to lower gasoline prices for average Americans. They also pointed out that Saudi Arabia is pumping 11.1 million barrels per day, a rate the country has not sustained in the past.
But the OPEC Plus decision means the production increase will end sooner than U.S. officials had hoped.
Energy analysts also say Saudi Arabia faced financial pressure to cut production as the price of oil fell nearly $80 a barrel for about two weeks last month. U.S. officials argued to their Saudi counterparts that the risks of letting the price fall below that point were minimal, but the Saudis would not budge, according to people familiar with the matter who spoke on condition of anonymity to discuss sensitive conversations. Saudi officials did not immediately respond to a request for comment.
Advocates of the trip also said it was justifiable given the visit’s other purposes, including bolstering a truce in Yemen’s long-running civil war. Aid groups say the truce, which was first agreed in April, has reduced violence by 60%. However, the warring parties recently failed to extend the six-month ceasefire, and US officials now fear a “return to war”, Tim Lenderking, the US special envoy for the United States, told reporters on Wednesday. Yemen.
During the trip, US officials also worked to open Saudi airspace to flights serving Israel, and they pressed the UAE to halt construction of a Chinese military base — an effort that is ongoing.
Even Saudi Arabia’s staunchest defenders admit that the timing of the production cut was a blow to the United States, and that it came despite fierce objections from American diplomats who pressed their counterparts until ‘in the early hours of Wednesday morning to delay the decision. .
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Biden officials across much of the administration — including the Energy Department, State Department and National Economic Council — rushed Thursday to craft policy responses to the announcement. No obvious solution is apparent. Energy officials have begun considering a possible ban on US oil exports.
White House officials have also explored the possibility of easing sanctions on Venezuela to supplement some of the oil lost through the OPEC production cut. This, however, is far from the case: the United States believes that Venezuelan President Nicolás Maduro must engage with the Venezuelan opposition before the sanctions are lifted.
Sullivan and National Economic Council Director Brian Deese said in a statement Wednesday that they would consult with Congress on additional mechanisms “to reduce OPEC’s control over energy prices” – suggesting that policymakers Americans may be interested in repealing a longstanding federal antitrust exemption. law that allows the consortium to coordinate effectively on prices. This measure, however, would require congressional approval and is facing resistance from industry, which greatly reduces its likelihood of being implemented.
Yasmeen Abutaleb contributed to this report.
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