No comment on Trump indictment from the MAGA-bashing Biden White House.
(CNSNews.com) – As the Biden administration ponders the path ahead in its strained relationship with Riyadh over oil production cuts, the Saudi energy minister has warned that decisions by some to use emergency oil stocks “may become painful in the months to come.”
Abdulaziz bin Salman said that “people” were using emergency oil reserves to manipulate markets rather than their intended purpose of mitigating shortages of supply.
In a further apparent swipe at the United States, he insinuated that the U.S. reaction to the October 5 decision by OPEC+ to reduce oil production by two million barrels a day had been an immature one.
The comments by the minister, at a major investment forum in Riyadh with a number of Americans present, are a further sign that the kingdom is not backing down in the dispute with one of its most important and longstanding allies.
Even so, Abdulaziz – son of King Salman and half-brother to Crown Prince Mohammed bin Salman – voiced optimism about the future. He called the row a “blip” in the context of a 90-year relationship, and expressed the view that “we’re going to get over this recent spat that I think was unwarranted.”
The “spat” revolves around the output cut decision by the Saudi-led cartel of oil producers that came despite strong U.S. appeals to increase output to bring down prices at the pump – and despite predictions by administration officials after President Biden’s trip to the kingdom over the summer that an output boost was on its way.
Biden slammed the OPEC+ announcement and signaled his intention to respond by “recalibrating” the relationship with Saudi Arabia.
Asked at the Future Initiative Investment conference by S&P Global vice chairman Daniel Yergin how he saw the bilateral relationship getting back on track, Abdulaziz replied, “Well, I think we as Saudi Arabia decided to be the maturer guys, and let the dice fall, and –”
After being cut short by applause, he went on to talk about how differing positions on oil capacity were open to debate, amid current global uncertainties.
Then Abdulaziz raised the issue of emergency oil stocks.
“People are depleting their emergency stocks, have depleted it, used it as a mechanism to manipulate markets, while its profound purpose was to mitigate shortages of supply.”
“Be it as it may, it’s everybody’s choice,” he added. “However – however, it is my profound duty to make clear to the world that using emergency stock may become painful in the months to come.”
Last week Biden announced the release of another 15 million barrels of oil from the Strategic Petroleum Reserve (SPR), completing a 180-million-barrel release he first authorized in March.
The president rejected Republican claims that the move was politically-motivated – an attempt to lower gas prices to benefit Democrats in the looming midterm elections. He also indicated that more releases may be coming “in the months ahead if needed.”
The SPR, stored in four underground caverns in Texas and Louisiana, is at its lowest level since 1984.
‘It’s not like some high school romance’
Asked at the White House on Wednesday about the Saudi suggestion that the U.S. reaction had been immature, National Security Council coordinator for strategic communications John Kirby replied, I, obviously, refute that, of course.”
“Look, this isn’t – you know, it’s not like some high school romance here. We’re talking about a significant, important bilateral relationship, a partnership that has survived over 80 years, an important partnership, a strategic partnership,” he said.
“And I don’t think talking about it in – in terms like that necessarily lends the gravity of how important this relationship is to – to the way that we’re considering it.”
On Abdulaziz’ remark that selling off oil reserves could have “painful” consequences, Kirby referred the question back to the Saudis, adding that he does not have insight into “what their future decisions will or won’t be.”
The New York Times reported on Tuesday that U.S. officials had been blindsided by the Saudis’ support for the output cuts, having thought that they had secured an agreement with the kingdom last May to boost production through year’s end.
Saudi officials reject U.S. accusations that the OPEC+ decision was taken to benefit Russia’s war in Ukraine and hurt U.S. interests. They point out that Saudi Arabia sided with Ukraine and the West in three of four U.N. General Assembly resolutions this year critical of the Russian invasion.
(The exception was a vote last April expelling Russia from the U.N. Human Rights Council. Saudi Arabia, whose own membership on the HRC has been controversial given its poor rights record, abstained on that occasion.)
Riyadh recently also pledged $400 million in humanitarian aid to Ukraine.
Noting both the U.N. votes and the aid pledge, Secretary of State Antony Blinken in an interview on Wednesday acknowledged what he called “positive developments,” but added that “they don’t compensate the decision made by OPEC+ on production.”
Blinken attributed the fact that oil prices have not risen despite the OPEC+ announcement to Biden’s SPR releases as well as “additional steps on our own production.”
Brent crude oil was trading at $95-$96 a barrel on Wednesday – up from around $94 on October 6, the day after the OPEC+ decision was announced. In the intervening fortnight it has fluctuated within the $90-$98 range.
The next OPEC+ meeting is scheduled for December 4.
See also:
Oil Dispute: Saudis’ OPEC Partners Side With Kingdom Against US Criticism (Oct. 18, 2022)
Kirby Dismisses Saudi Defense of Oil Production Cut As 'Spin' and Deflection (Oct. 14, 2022)