Saudi Arabia says that the U.S. had urged the kingdom to delay the decision taken by OPEC and its partners – including Russia to reduce oil production, which would have come just prior to the forthcoming American Midterm election.
DUBAI, United Arab Emirates (AP) — Saudi Arabia said Thursday that the U.S. had urged the kingdom to delay the decision of OPEC and its partners – comprising Russia in order to reduce oil production by one month, which would have come just before the American midterm elections.
A statement from the Saudi Foreign Ministry didn’t specifically discuss the upcoming elections, which are vital for U.S. President Joe Biden to keep his Democratic Party’s slim majority in Congress. The statement did say it the U.S. “suggested” the cuts be delayed by one month, rather than the cuts being made at the OPEC’s Oct. 5-meeting in Vienna.
A delay of a month would have been just before November. 8 elections, in which case they wouldn’t influence the price at the pump.
The rising cost of oil and, in turn, higher prices for gasoline have been the main factor in inflation across the U.S. and around the world, causing more world economic problems due to Russia’s ongoing war with Ukraine also caused disruption to global food supplies. For Biden, his gasoline prices are rising, and upwards could impact the vote. Biden and a number of lawmakers have warned that the long-standing secure relationship with China might be reviewed.
It is true that the White House has rejected an attempt to link the OPEC request with the elections, however, Saudi Arabia issuing a rare long-winded statement reveals how strenuous relations exist between the two nations. This is even more than a decade after the killing as well as the dismemberment of Washington Post columnist Jamal Khashoggi and his family, which Washington believes was carried out on the directives of Saudi King Mohammed bin Salman. In addition, rising energy costs can be an opportunity for Russia could use against the West which continues to arm and assist Ukraine.
The statement from Saudi Foreign Ministry acknowledged that the kingdom was talking with authorities in the U.S. about postponing OPEC+’s 2 million barrel reduction announced this week.
“The government of the kingdom clarified through its continuous consultation with the U.S. administration that all economic analyses indicate that postponing the OPEC+ decision for a month, according to what has been suggested, would have had negative economic consequences,” the ministry stated it said in the statement.
The ministry’s statement was a confirmation of a Wall Street Journal article this week, which also stated that there was evidence that the U.S. sought to delay the OPEC+ production cut until shortly before the midterm elections. The Journal also quoted unnamed Saudi officials who described the decision as a political strategy by Biden in advance of the midterm elections.
The kingdom also condemned attempts to tie the decision of the kingdom to Russia’s military campaign against Ukraine.
“The kingdom stresses that while it strives to preserve the strength of its relations with all friendly countries, it affirms its rejection of any dictates, actions, or efforts to distort its noble objectives to protect the global economy from oil market volatility,” it added. “Resolving economic challenges requires the establishment of a non-politicized constructive dialogue, and to wisely and rationally consider what serves the interests of all countries.”
Two of Saudi Arabia and the neighboring United Arab Emirates, key producers of OPEC have voted in support of a United Nations General Assembly resolution Wednesday to denounce the Russian government’s “attempted illegal annexation” of four Ukrainian regions and demanded its immediate end.
At one point, the rigors of the beast could crush up the U.S. to a halt through its oil embargo of the 1970s, OPEC needed non-members like Russia to push for cuts in production in 2016 after prices plunged below $30 per barrel due to increasing American production. The 2016 agreement led to the known OPEC+ which joined in the cut-off of production to boost prices.
The coronavirus outbreak temporarily saw prices for oil fall into negative territory before the flow of air traffic and economic activity picked up after global lockdowns. Benchmark Brent crude sat over $92 per barrel on Wednesday, however, fears of about inflation and how it could cause the possibility of a recession to have oil-producing countries fearing that prices will fall dramatically.
Biden famously called Saudi Arabia a “pariah” during his presidential campaign and visited the kingdom in July. He slapped Prince Mohammed before a meeting. Despite his efforts, however, Saudi Arabia has been open to maintaining high oil prices to help fund Prince Mohammed’s ambitions, such as his $500 billion, futuristic desert city project known as Neom.
The day before, Biden cautioned of the consequences for Saudi Arabia over the OPEC+ decision.
“There’s going to be some consequences for what they’ve done, with Russia,” Biden declared. “I’m in no way going to go into my thoughts or what I’m thinking of. However, there will be consequences. there will be the consequence.”.