Some officials in the Biden administration bristled at the cut declared by the OPEC Plus cartel, seeing it as a direct affront to the president that threatens to hurt the Democrats’ standing in the 2022 midterms because it will drive up oil prices. gasoline.
American officials must now grapple with how to respond to a possible price increase that could help finance Russia’s war in Ukraine, compound major challenges facing the American and European economies, and give Republicans a powerful new argument on inflation.
A White House official called OPEC’s decision a “disaster.” Another said administration officials viewed the move as a deliberate provocation designed to boost Republican chances so close to the election. Other officials said they did not interpret the Saudi decision as malicious, but saw it as a short-sighted effort to maximize oil profits despite the economic and geopolitical fallout.
Biden said Thursday that the cartel’s decision did not undermine the goal of his July visit, but that it was still disappointing. “The trip was not essentially for 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 all of Biden’s advisers had agreed to the trip over the summer. “There was consensus throughout the president’s senior national security team on the importance of this trip to advance the national security interests of the United States,” she said in a statement.
But that did not calm critics 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 Saudi Crown Prince Mohammed bin Salman, the country’s de facto leader, bumped fists, White House aides knew the trip would bring criticism. Biden had declared that human rights would be at the “core” of his foreign policy and said he would make the oil-rich monarchy a “pariah.” But the president also remained keenly aware of the burden high gasoline prices were having on middle-class Americans.
Biden’s top Middle East and energy advisers, Brett McGurk and Amos Hochstein, pushed for the trip as a means 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 deeply divided on how to treat the oil-rich autocracy. Those in favor of a cool-headed approach pointed to 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 review the relationship.
Many officials in high-level positions at the State Department and the US Agency for International Development also said they felt they had room to maneuver, given the US’s growth as an oil-producing energy superpower. Creating a clean break with former President Donald Trump’s remarkably close relationship with the kingdom also had wide appeal among Biden’s political appointees.
Some US officials said Secretary of State Antony Blinken shared concerns about the trip to Saudi Arabia, even though the top diplomat ultimately supported and participated in the visit.
“Secretary Blinken fully supported the Administration’s engagement with our regional partners on the multiplicity of interests we have,” said State Department spokesman Ned Price.
McGurk and Hochstein’s support for the trip began to win favor with the White House in September 2021, when the price of oil rose and resentment in the Gulf led the United Arab Emirates and Saudi Arabia to reject repeated requests for United States to increase oil production, according to senior officials and congressional aides familiar with the matter. The defining moment for the push to get closer to the Saudis came when Russia invaded Ukraine on February 24, sending energy prices skyrocketing and turning high gas costs already a problem. internal political responsibility of Biden, in a geopolitical setback.
Some Democrats, already skeptical about the US-Saudi relationship, seized on the OPEC Plus decision to criticize the trip.
“I think it’s time for a general reassessment of the US alliance with Saudi Arabia,” Sen. Chris Murphy (D-Conn.), chairman of the Senate foreign relations subcommittee on the Middle East, told CNBC.
A Democratic congressional aide close to administration officials, who, like others, Speaking on condition of anonymity to discuss US policy, he said: “This trip was hotly debated within the administration, and I don’t know how you could argue now that it wasn’t a mistake.”
White House officials have adamantly denied that the purpose of the trip was to stimulate Saudi oil production. US officials who favor the US-Saudi relationship said critics misunderstood the goals of the visit and overestimated Riyadh’s ability to lower gasoline prices for the average American. They also stressed 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 output surge will come to an end sooner than US officials expected.
Energy analysts also say Saudi Arabia faced financial pressure to cut output as the price of oil fell close to $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 did not relent, according to people familiar with the matter who spoke on condition of anonymity to discuss sensitive talks. Saudi officials did not immediately respond to a request for comment.
Supporters of the trip also said it was justifiable given the visit’s other goals, which included bolstering a truce in Yemen’s long-running civil war. Aid groups say the truce, which was first agreed in April, reduced violence by up to 60 percent. 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 Yemen, told reporters on Wednesday. .
On the trip, US officials also worked to open Saudi airspace to flights serving Israel and pressured the United Arab Emirates to halt construction of a Chinese military base, an effort that continues.
Even Saudi Arabia’s staunchest supporters admit that the timing of the production cut was a major blow to the United States, and that it came despite strong objections from US diplomats who pressed their counterparts early Wednesday to delay decision. .
Biden officials across a wide section of the administration, including the Energy Department, the State Department and the National Economic Council, scrambled Thursday to craft policy responses to the announcement. There are no apparent obvious solutions. Energy officials have begun discussing a possible ban on US oil exports.
White House officials have also been exploring the possibility of easing sanctions on Venezuela to supplement some of the oil lost from OPEC’s production cut. However, that is a long shot: The United States believes that Venezuelan President Nicolás Maduro must engage with the Venezuelan opposition before 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 loosen OPEC’s grip on energy prices,” suggesting that US lawmakers Law that allows the consortium to coordinate effectively in terms of prices. That measure, however, would require congressional approval and faces industry resistance, greatly reducing the likelihood of its implementation.
Yasmeen Abutaleb contributed to this report.