U.S. and Saudi officials trade shots over OPEC cuts, testing longstanding ties

A feud between the U.S. and Saudi Arabia escalated further Thursday in a tense back-and-forth over President Biden’s accusations that a Saudi-approved cut in global oil production was a gift to Russian President Vladimir Putin and a response from the oil-rich kingdom that it would not be bullied.

Analysts said the rare public animosity will not break deeper U.S.-Saudi security, economic and diplomatic ties, but the strains in the relationship were evident after officials in Riyadh bluntly rejected Mr. Biden’s criticisms and appeared to suggest not too subtly that the president’s primary concern was his short-term political interests and the price of a gallon of gas ahead of the Nov. 8 midterm elections.

The White House, lawmakers on Capitol Hill and private market analysts say the planned cuts announced last week by the Saudi-led OPEC+ cartel of producers — equal to 2 million barrels per day — will effectively give Mr. Putin desperately needed revenue to finance his war in Ukraine. Lower production means higher prices for Russian gas exports and upward pressure on the politically sensitive prices that Americans pay for a gallon of gas.

OPEC’s decision flew in the face of Mr. Biden’s thinly veiled public pleas and private lobbying to Saudi Arabia to maintain production levels. Mr. Biden on Wednesday announced that his administration would reevaluate bilateral ties, and key Democrats on Capitol Hill said U.S. aid and arms sales to Riyadh could be curbed or cut off entirely.

“There’s going to be some consequences for what they’ve done,” Mr. Biden told CNN.

Saudi Arabia upped the ante Thursday with a scathing rejection of U.S. accusations that it sided with Russia. It said the reason for the production cut was purely economic. 

The kingdom “rejects any dictates,” the Saudi Foreign Ministry said in a statement on Twitter, and Riyadh acted to “protect the global economy from oil market volatility.”

“The government of the Kingdom of Saudi Arabia affirms that any attempts to distort the facts about the kingdom’s position regarding the crisis in Ukraine are unfortunate, and will not change the kingdom’s principled position,” the statement said. 

The Saudi statement also let it be known that the White House appealed for a one-month delay in announcing the production cut, which would have pushed any market reaction past the midterm elections. John Kirby, Mr. Biden’s national security spokesman, issued an almost immediate response bluntly challenging the Saudi account.

“The Saudi Foreign Ministry can try to spin or deflect, but the facts are simple,” Mr. Kirby said. He said other producers in OPEC+ said privately that they were ready to delay an announcement but “felt coerced to support Saudi’s direction.”

The Saudi statement created immediate political headaches for Mr. Biden and an opening for Republicans.

Rep. Thomas P. Tiffany, Wisconsin Republican and member of the House Natural Resources Committee, called for a congressional investigation into whether politics played a role in Mr. Biden’s oil diplomacy.

“These are very serious allegations, and if the Biden administration did, in fact, attempt to coordinate with a foreign government to influence the U.S. election, that’s something the American people deserve to know,” Mr. Tiffany said. “[House Speaker Nancy] Pelosi and Congress have a responsibility to get to the bottom of these deeply troubling reports as soon as possible.” 

Mr. Kirby denied that politics played a role in the U.S. appeals to Riyadh. He said the administration gave Saudi Arabia “analysis to show that there was no market basis to cut production targets” and suggested that OPEC wait until its meeting in early December “to see how things developed” before making cuts. 

“The world is rallying behind Ukraine in combating Russian aggression,” Mr. Kirby said in a statement. “The U.S. has played a key role in assembling this coalition and has engaged the Saudi leadership in that effort.” 

He said Saudi decision-makers knew the cuts would “increase Russian revenues and blunt the effectiveness of sanctions.”

Mr. Biden has not said how relations with Saudi Arabia might change after the internal review. Relations were strained by the 2018 killing of U.S.-based dissident journalist Jamal Khashoggi by a top-level Saudi government hit team in Turkey. U.S.-Saudi links are broad and deep: Some 70,000 Americans work in the kingdom, the U.S. is a major arms supplier, and Saudi Arabia is seen as the bulwark of a Gulf Arab alliance with Washington to contain regional rival Iran.

Although the oil production cut will benefit Mr. Putin, Saudi Arabia sided with the U.S. this week in a U.N. General Assembly vote condemning recent Russian land grabs in Ukraine despite a furious lobbying campaign by the Kremlin.
 
“As the president has said, we are reevaluating our relationship with Saudi Arabia in light of these actions and will continue to look for signs about where they stand in combating Russian aggression,” Mr. Kirby said.

Cooperation and tension

U.S. relations with Riyadh have long been a mix of cooperation and tension. Citing Khashoggi’s death, Mr. Biden as a candidate for president in 2020 promised to make the kingdom a “pariah.”

The U.S. surpassed Saudi Arabia as the world’s largest energy producer, and Senate Foreign Relations Committee Chairman Robert Menendez, New Jersey Democrat, and other powerful voices on Capitol Hill have questioned the benefits of the alliance.

OPEC’s latest move amounts to a firm “declaration of independence” by the kingdom, said Gerald M. Feierstein, director of Arabian Peninsula affairs at the Middle East Institute.

“What the OPEC+ decision makes clear is that the effect of Saudi decision-making on U.S. national interests will be, at the most, one factor among many for the Saudi leadership and will not be determinative,” he wrote in an analysis Thursday. “It’s unlikely that the decision will have a substantial short-term impact on ties, but it likely cements in place the transactional nature of the bilateral relationship.”

Mr. Biden faced backlash for fist-bumping Crown Prince Mohammed bin Salman during his July visit to Saudi Arabia. U.S. intelligence concluded that the crown prince directed the Khashoggi operation.

Washington also has been ambivalent about the hard-charging prince’s intervention in Yemen’s civil war against the Iran-backed Houthis. The conflict in the region’s poorest country has produced what aid groups say is one of the world’s worst humanitarian crises.

The president was willing to withstand the criticism to increase the supply of oil, pushing Saudi Arabia to increase its output by about 750,000 barrels per day as the Ukraine war and sanctions on Russia roiled the markets.

At the time of the visit, the average price of gas in the U.S. was $4.52 per gallon, according to AAA. Prices at the pump have fallen steadily in recent months after hitting a record-high average of $5.01 per gallon in June.

OPEC’s announcement stands to chip away at Mr. Biden’s goodwill among voters. 

The president defended the trip last week after OPEC’s announcement. He told reporters that the visit “was not essentially about oil,” though he pledged this week to reevaluate the U.S. relationship with the kingdom. 

Mr. Kirby told reporters Tuesday that the president questions whether the U.S. relationship with the kingdom is “where it needs to be” and whether it is “serving our national security interests.”

Mr. Menendez sharply criticized Saudi Arabia for the production cut in a lengthy statement this week and pledged to block “any cooperation with Riyadh until the kingdom reassesses its position.” He called the oil production cut a gift to Mr. Putin.

“There simply is no room to play both sides of this conflict: Either you support the rest of the free world in trying to stop a war criminal from violently wiping an entire country off of the map, or you support him,” Mr. Menendez said. “The Kingdom of Saudi Arabia chose the latter in a terrible decision driven by economic self-interest.”

He added, “The United States must immediately freeze all aspects of our cooperation with Saudi Arabia, including any arms sales and security cooperation beyond what is absolutely necessary to defend U.S. personnel and interests.”

As the White House announced the review Tuesday, Sen. Richard Blumenthal, Connecticut Democrat, and Rep. Ro Khanna, California Democrat, introduced a bill that would immediately pause all U.S. arms sales to Saudi Arabia for one year. This pause would also halt sales of spare and repair parts, support services and logistical support.

Saudi Arabia has been a key customer of U.S. arms sales. The administration has notified Congress of more than $4 billion in arms to Saudi Arabia, according to the Washington-based Forum on the Arms Trade. In August, the administration offered details of a potential sale of more than $3 billion in new arms for Riyadh, including 300 Patriot missiles.