Saudi says U.S. seeks to delay OPEC+ output cuts by 1 month

DUBAI, United Arab Emirates (AP) — Saudi Arabia said on Thursday the United States had urged it to delay a decision by OPEC and its allies — including Russia — to cut oil output for a month. Such a delay could help reduce the risk of a surge in gasoline prices ahead of next month’s U.S. midterm elections.

The statement issued by the Saudi foreign ministry did not specifically mention U.S. President Joe Biden’s attempt to maintain his narrow congressional edge in eight elections in November. However, it said the U.S. “recommended” to delay production cuts by a month. Eventually, OPEC announced production cuts at its October meeting. 5 Vienna Conference.

Delaying production cuts could delay any rise in natural gas prices until after the election.

Rising oil prices — and gasoline prices — have been a key driver of inflation in the U.S. and around the world, with global economic woes worsening as Russia’s months-long war against Ukraine also disrupts global food supplies. For Biden, rising gasoline prices could sway voters. He and many lawmakers have warned that the long-standing security-based relationship between the United States and Saudi Arabia could be reconsidered.

The Saudi foreign ministry’s decision to issue a rare lengthy statement showed how strained relations between the two countries have grown.

The White House pushed back on Thursday, denying that the requested delay was related to the U.S. election, instead linking it to economic considerations and Russia’s war on Ukraine.

“We provided Saudi Arabia with an analysis that showed there was no market basis for the production cut target, and they could easily wait for the next OPEC meeting to see how things develop,” said John Kirby, strategic communications coordinator at the National Security Council.

“Other OPEC countries have communicated with us privately and they also disagree with the Saudi decision, but feel compelled to support the Saudi direction,” he added, without naming names.

U.S.-Saudi relations have been a concern since Washington Post columnist Jamal Khashoggi was killed and dismembered in 2018, which Washington believes was an order from Saudi Crown Prince Mohammed bin Salman. At the same time, higher energy prices have provided Russia with weapons against the West, which has been arming and supporting Ukraine.

The statement from the Saudi foreign ministry acknowledged that the kingdom had been in discussions with the United States to delay OPEC+’s 2 million-barrel production cut. announced last week.

“The Saudi government has clarified through ongoing consultations with the U.S. government that all economic analysis indicates that delaying the OPEC+ decision by a month, as recommended, would have negative economic consequences,” the ministry said in a statement.

The ministry’s statement confirmed the details in the WSJ article Citing unnamed Saudi officials this week, the U.S. is trying to delay OPEC+ production cuts until the midterm elections. The Wall Street Journal quoted Saudi officials as saying the move was a political maneuver by Biden ahead of the vote.

Saudi Arabia also criticized attempts to link its decision to Russia’s war on Ukraine.

“Saudi Arabia emphasizes that while it strives to maintain the strength of its relations with all friendly nations, it certainly rejects any order, action or effort to distort its noble goal of protecting the global economy from volatility in the oil market,” it said. “Solving economic challenges , there needs to be a constructive, depoliticized dialogue that considers wisely and rationally what is in the interests of all countries.”

Saudi Arabia and neighboring United Arab Emirates, major OPEC producers, voted on Wednesday for a UN General Assembly resolution Condemned Russia’s “attempt to illegally annex” four Ukrainian territories and demanded their immediate withdrawal.

In Congress, U.S. Senators. Connecticut Democrat Chris Murphy, a longtime critic of Saudi Arabia, has proposed freezing military aid to the kingdom. He suggested stopping plans to transfer surface-to-air missiles to Riyadh and instead sending them to Ukraine, which has faced Russian fire in recent days..

Saudi Arabia has been the target of Yemen’s Iran-backed Houthi rebels, who have seized the country’s capital in a long and bitter war in the Arab world’s poorest country.U.S. air defenses critical to shooting down bomb-carrying drones fired by Houthis Aim for the kingdom.

OPEC was once strong enough to bring the U.S. to a standstill amid an oil embargo in the 1970s, but as U.S. production rose and oil prices fell below $30 a barrel, OPEC needed non-members like Russia to push for production cuts in 2016. The 2016 agreement spawned so-called OPEC+, which joined the cartel to cut production to help boost prices.

Coronavirus pandemic pushes oil prices briefly into negative territory Before air travel and economic activity rebounded after the global lockdown. Benchmark Brent crude traded above $92 a barrel early Wednesday, but producers fear prices could fall sharply amid efforts to fight inflation.

Biden, who called Saudi Arabia a “untouchable” during the 2020 campaign, traveled to the country in July and punched and kicked Prince Mohammed ahead of a meetingDespite the outreach, the kingdom has supported keeping oil prices high to fund Prince Mohammed’s ambitions, including his planned $500 billion future desert city project Neom.

Prince Mohammed and his father, King Salman, hosted former President Donald Trump on his first trip abroad and forged closer ties with his administration. However, even Trump has pressured Saudi Arabia over oil production, telling the crowd that King Salman “may not be there” without US military support.

On Tuesday, Biden warned about the impact of Saudi Arabia on the OPEC+ decision.

“What they did with Russia will have some consequences,” Biden said. “I’m not going to talk about what I think and what I think. But there will be — there will be consequences.”


Associated Press writer Aamer Madhani in Washington contributed to this report.


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