"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, people familiar with the talks said. 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 two million barrels a day.
Adrienne Watson, a National Security Council spokeswoman, rejected Saudi contentions that the Biden administration was driven by political calculations. U.S. officials questioned a Saudi analysis that oil prices were 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."
National Security Council spokesman John Kirby said on Tuesday that President Biden believes the U.S. should review the relationship with Saudi Arabia in light of the OPEC+ decision, "and take a look to see if that relationship is where it needs to be and that it is serving our national-security interests." He said the president was willing to discuss the bilateral relationship with members of Congress.
In an interview with CNN broadcast Tuesday evening, Mr. Biden said that when Congress is in session "there's going to be some consequences for what they've done, with Russia."
On Tuesday, Prince Faisal bin Farhan, the Saudi foreign minister, said the OPEC+ decision was purely economic and had no political dimensions. The alliance seeks to stabilize energy markets and advance the interests of producers and consumers, he said in an interview with Saudi-owned Al Arabiya television.
Prince Faisal said relations with the U.S. are longstanding and strategic and that military cooperation between the two countries has contributed to regional peace and stability.
U.S. officials said the OPEC+ decision was unhelpful as inflation driven by high energy prices threatens global growth and represents an economic weapon against the West for President Vladimir Putin of Russia. It threatens to drive up U.S. gasoline prices ahead of the Nov. 8 midterms.
The one-month delay requested by Washington would have meant a production cut made in the days before the election, too late to have much effect on consumers' wallets ahead of the vote.
Since the OPEC+ decision, the White House vowed to fight OPEC's control of the energy market. Lawmakers 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 this month. 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, people familiar with the matter said.
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 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 U.S.-Saudi partnership, people inside the Saudi government said.
If anything, the people inside the Saudi government said, 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.
Prince Mohammed -- who runs the kingdom day to day for his father, King Salman -- has tried to maximize Saudi Arabia's economic strength. With high energy prices, the kingdom's economic growth this year is estimated by the IMF at more than 10% -- making it one of the best performers globally.
Prince Mohammed has told advisers that he isn't willing to sacrifice much for the Biden administration, the people inside the Saudi government said, citing its critical view of the Saudi war in Yemen, bid to close a nuclear deal with Iran that Riyadh opposes and Mr. Biden's own comments on the prince.
In August, the Saudis had planned to push OPEC+ to raise oil production by 500,000 barrels a day in an effort to please Mr. Biden, but Prince Mohammed ordered the increase lowered to a token 100,000 barrels a day after the Biden visit, the people inside the Saudi government said.
The U.S. State Department's energy-security envoy, Amos Hochstein, sent the Saudi energy minister, Prince Abdulaziz bin Salman, an email that suggested he had broken his word promising a larger increase, people familiar with the matter said.
The email angered Prince Abdulaziz and strengthened his resolve to forge an oil policy independent of the U.S., the people said.
In September, Prince Abdulaziz engineered OPEC+'s first production cut since the pandemic, erasing the 100,000-barrel-a-day increase from August. Then, before the Oct. 5 OPEC+ meeting, Prince Abdulaziz called Persian Gulf oil chiefs and urged them to back a bigger cut, OPEC+ delegates said.
He cited a Western plan for an oil-price cap as a direct attack on crude producers, OPEC+ delegates said. "It's us against them," he told at least two Gulf oil ministers, the delegates said.
U.S. officials launched an intense lobbying campaign to persuade Saudi Arabia to delay its plans, people familiar with the matter said. White House officials held multiple calls with Prince Mohammed, the people said, and Treasury Secretary Janet Yellen spoke to the Saudi finance minister.
The United Arab Emirates, another significant OPEC producer, opposed the production cut and advocated privately for a one-month delay, in line with U.S. requests, people familiar with its position said.
Kuwait, Iraq and Bahrain also pushed back privately against the proposed cut, but ultimately went ahead with the decision in order to preserve unity within OPEC+, U.S. and regional officials said." [1]
1. Saudis Spurned Biden On Call to Delay Oil Cuts
Said, Summer; Faucon, Benoit; Nissenbaum, Dion; Kalin, Stephen.
Wall Street Journal, Eastern edition; New York, N.Y. [New York, N.Y]. 12 Oct 2022: A.1.
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