EDITOR'S NOTE: Is Biden reconsidering America’s alliance with Saudi Arabia? Most Americans saw this coming when China opened its yuan futures trading to Saudi Arabia years ago. The concern then was that petroyuan trading with the UAE would encourage other US allies to shift to the yuan and away from the dollar. Saudi Arabia’s response to Biden is simply a furthering of that earlier development. And de-dollarization (read: rejecting American economic hegemony) among several nations across the globe shouldn’t be all that surprising as well. But a break with Saudi Arabia would entail significant geopolitical and military shifts as well in addition to trade. And Biden is looking to punish the nation for its perceived betrayal. Here’s what’s likely to happen next.
(Bloomberg) — President Joe Biden voiced his fury with Saudi Arabia over OPEC+ oil production cuts Tuesday, accusing the kingdom of allying itself with Russia and vowing to engage with US lawmakers clamoring to punish Riyadh.
“There’s going to be some consequences for what they’ve done, with Russia,” Biden said in an interview with CNN.
The president added that he believes it’s time for the US to rethink its relationship with Saudi Arabia. But he and senior administration officials also conceded that a legislative plan to retaliate was unlikely to materialize until after November’s midterm elections, underscoring the complex calculations the US faces as it weighs a longtime partnership that has quickly soured.
Earlier Tuesday, National Security Council spokesman John Kirby called the OPEC+ decision to slash oil production by 2 million barrels per day “short-sighted” and said “it benefited Russia at a time when nobody in any capacity should be trying to benefit Vladimir Putin.” Russia is a leader of the OPEC+ alliance.
And the administration warned that the move risked undermining the Group of Seven’s diplomatic efforts to support developing countries with infrastructure investment, since those nations were least equipped to bear the burden of higher oil prices.
But the anger expressed toward Saudi Arabia by Biden administration officials was not immediately met with commensurate action.
‘Process’ For Punishment
The president would only say he was “in the process” of evaluating consequences for the kingdom, and indicated they were not likely before lawmakers returned from a recess scheduled to last into November.
“I’m not going to get into what I’d consider and what I have in mind, but there will be consequences,” he said.
State Department spokesman Ned Price said Tuesday that the administration would evaluate proposals from Congress and speak to allies about the US partnership with Saudi Arabia over the coming weeks and months. Kirby, for his part, said the White House would “start to have conversations” when lawmakers returned, while downplaying internal efforts within the administration.
“We’re not announcing like a formal policy review here with a special team or anything like that — what we’re talking about here is the president’s belief that the relationship needs to be reviewed,” Kirby said, adding that he could not provide a time frame or blueprint for the reevaluation.
Other administration officials have repeatedly declined the chance to endorse specific proposals from Capitol Hill, including bipartisan legislation known as the “NOPEC” bill that would allow US lawsuits against countries in the cartel for manipulating energy markets.
The conflicting messaging revealed the difficult questions facing a West Wing infuriated by the OPEC+ announcement, which threatens to elevate gasoline prices just as voters are headed to the polls. The sting was particularly acute in the aftermath of Biden’s trip to Saudi Arabia three months ago, where he met with Crown Prince Mohammed bin Salman despite having previously criticized the country’s de facto ruler for his involvement in the killing of Washington Post columnist Jamal Khashoggi.
Saudi Arabia appeared eager to deescalate the growing rift Tuesday, with Saudi Foreign Minister Prince Faisal bin Farhan saying his country and the US shared a “strategic” partnership and that the decision by OPEC+ was “purely economic.”
“Military cooperation between Riyadh and Washington serves the interests of both countries and has contributed to stability in the region,” he said in an interview with Al Arabiya.
That political reality has fanned concerns by some in the administration over other White House energy policies, and how to sanction Moscow — and Russia’s significant energy sector — without further upsetting markets.
Targeting Arms Sales
It’s also prompted a flood of proposals from administration allies on Capitol Hill. Senator Richard Blumenthal of Connecticut and Representative Ro Khanna of California proposed legislation Tuesday to halt US arms sales to Saudi Arabia for one year.
“Saudis must reverse their oil supply cuts, which aid and abet Russia’s savage criminal invasion, endanger the world economy, and threaten higher gas prices at US pumps,” Blumenthal said. “We cannot continue selling highly sensitive arms technology to a nation aligned with an abhorrent terrorist adversary.”
Their proposal joins others made by members of Congress since the production cutbacks were announced and since Russia’s barrage of missile attacks on civilian infrastructure across Ukraine.
Senate Foreign Relations Chair Robert Menendez on Monday urged a freeze on all US cooperation with Saudi Arabia. Last week, three House Democrats — New Jersey’s Tom Malinowski, Pennsylvania’s Susan Wild and Illinois’ Sean Casten — said they planned to introduce a bill to remove all US troops and missile defense systems from Saudi Arabia and the United Arab Emirates, another OPEC+ member that supported the production cuts.
The White House on Tuesday signaled it was unlikely to support legislation withdrawing support for the integrated air and missile defense network provided to Arab partners and intended as a bulwark against Iran. Kirby noted that there were tens of thousands of Americans living in Saudi Arabia, in addition to American troops stationed in the region.
And the White House has previously expressed unease with the NOPEC legislation.
“The potential implications and unintended consequences of this legislation require further study and deliberation, particularly during this dynamic moment in the global energy markets brought about by President Putin’s invasion of Ukraine,” Biden’s former Press Secretary Jen Psaki said in May.
The dilemma illustrated the difficulty administration officials face as they attempt to calibrate a response without harming US interests — or voters’ pocketbooks. White House Press Secretary Karine Jean-Pierre said Tuesday that the effort would involve every part of the White House.
“This is something the president is going to take very seriously, and we’ll have more to share,” she said.
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