HomeWorldJoe Biden's Picks After OPEC Cuts: Woo Saudi Arabia, Or Retaliation?

Joe Biden’s Picks After OPEC Cuts: Woo Saudi Arabia, Or Retaliation?

President Joe Biden faces a dicey choice after the world’s oil giants decided to slash production weeks ahead of crucial midterm elections that could turn the price of gasoline: should he woo Saudi Arabia? Stick with your policy or retaliate?

Saudi-led announcement OPEC+ energy cartel to pump 2 million barrels less A day in Washington was widely seen as a stab in the back of Biden, who just three months ago abandoned his vow to make Saudi Arabia a “pariah” and there at the court of the kingdom’s autocratic prince had traveled.

The question now facing Biden is what to do with this seeming betrayal. In deliberately soft remarks, he told reporters on Thursday that he was “disappointed” and was considering an unspecified “option”. But fellow Democrats, eager to demonstrate what they see as the president’s utmost respect for the Saudis and rigor to their constituent chiefs in the election, increased the pressure on Biden to punish Riyadh.

“He should just start taking stuff back,” Representative Tom Malinowski, DN.J., said in an interview, referring to the US military presence in Saudi Arabia. “That will get their attention. Action for action. Call their hoax. Do they really think they can trade their US security partner for a Russian security partner or a Chinese security partner? They know they do that.” can not do.”

Sen. Chuck Schumer, D.Y., majority leader, said Saudi Arabia’s President Vladimir Putin’s decision to forge an alliance with Russia to lower oil prices was a grave mistake.

A photographer takes photographs of the Khurais oil field during a visit by journalists, 150 km east-northeast of Riyadh, Saudi Arabia, June 28, 2021. (ap/file)

“What Saudi Arabia did to help Putin continue the hateful, vicious war against him” Ukraine Will be remembered by the Americans for a long time,” he said. “We are looking at all legislative means to deal with this appalling and deeply cynical action.”

Biden gave little indication of how far he would go.

Asked on Thursday about production cuts, Biden said “we are looking at options” for oil from OPEC+ countries. “We haven’t made up our mind yet,” he said.

His administration advised caution, hoping that at the end of the day, the daily output cut would actually be half of the 2 million barrel target because some oil producers were already not meeting their targets. Rather than punishing Saudi Arabia, Biden allies focused more on countering his move by releasing more oil from the Strategic Petroleum Reserve and possibly seeking rapprochement with oil-pumping Venezuela.

The administration is also considering steps to pressure domestic energy companies to lower retail prices, possibly including limits on exports of petroleum products. “We are not announcing any steps on that front, but there are measures that we will continue to assess,” Brian Deez, the president’s national economic adviser, told reporters.

President Joe Biden, October 6, 2022, before departing the White House to visit New Jersey and New York. (Doug Mills/The New York Times)

The OPEC+ decision could hardly have come at a worse time politically for Biden, who made his argument for a mid-term campaign on falling gas prices. White House Chief of Staff Ron Klein has systematically tracked prices at the pump for months as it declined, and Democrats felt renewed momentum as a result.

But gas prices began to rise even before the Saudi-led move, due to refinery issues in the west coast and midwest. The national average rose 7 cents from Monday to $3.86 on rising demand and falling stocks, though it remained well below a peak of $5 a gallon in June.

The Saudis say the production cut was not meant as a shot at Biden and has sent papers and charts to administration officials to justify it. With the price of oil falling below $80 a barrel in recent days, the Saudis told US officials they worried it would head into the $70s and possibly $60s, making their own energy-dependent budget unstable. Will go

Biden administration officials fear a real crisis could hit in December when a price cap held by the United States to restrict Russian oil profits goes into effect and an EU embargo on purchases of Russian crude is about to begin. Is.

People and the media gather at the entrance of the building of the Organization of the Petroleum Exporting Countries, OPEC, Vienna, Austria, Wednesday, October 5, 2022. (AP)

Biden’s options for countering production cuts are limited and carry trade-offs. They have already ordered the release of more oil from the Strategic Petroleum Reserve, but since the reserve is now at its lowest level in four decades, the risk looms large in case of a natural disaster such as war or another hurricane.

He could push for limiting exports of processed fuels such as gasoline and diesel, which would expand supply and lower prices domestically. But it will hurt trading partners, especially European allies trying to distance themselves from Russian energy and add to global inflationary pressures.

The administration may open up more federal land and water for drilling and soften regulations on drilling, exploration and pipeline laying to increase domestic production, though that could spark a backlash among environmentalists.

“They need to loosen the rules, they need to issue all those permits sitting at one’s desk for drilling on federal lands, and they need to come down the Keystone XL pipeline to deliver Canadian oil sands to American consumers. needs to be allowed,” said Darlene Wallace, board member of the Oklahoma Energy Producers Alliance. “And the president needs to encourage investors to invest in the oil business.”

The easing of sanctions on Iran and Venezuela could free up more than 1 million barrels of oil a day, which would help lower prices and potentially replace some of the Russian barrels sold to Chinese and Indian refineries. But nuclear talks with Iran have stalled with hopes of a breakthrough, and prospects for a deal with Venezuela remain bleak.

The Wall Street Journal has reported that the Biden administration was preparing to ease restrictions to allow Chevron to resume pumping in exchange for moving toward elections in 2024. But in a statement, the White House insisted it “has no plans to change our sanctions policy without constructive steps from the Maduro regime.”

In brief remarks to reporters on Thursday, Biden did not rule out a possible shift toward Venezuela. “There are so many options,” he said. “We haven’t made up our mind yet.” Asked what Venezuela would have to do to persuade the United States to ease sanctions, Biden said, “A lot.”

A 3D-printed oil pump jack is seen in front of the OPEC logo displayed in this illustration picture, April 14, 2020. (Reuters/File)

The president defended his decision to travel to Saudi Arabia in July, where he exchanged a fistfight with its de facto ruler, Crown Prince Mohammed bin Salman, despite a campaign to assassinate Saudi journalist Jamal Khashoggi. Pledged to isolate the state and what the CIA said was the killing of the American resident on the orders of Crown Prince Mohammed.

While not formally announced, US officials said privately at the time that they had the understanding that Saudi Arabia and other energy powers would increase output from the fall.

But Biden insisted again on Thursday that he had other goals for visiting Saudi Arabia, such as encouraging diplomatic ties with Israel.

“The trip was not necessarily for oil,” the president said. “The trip was about the Middle East and Israel and the rationalization of positions.”

“But it’s a disappointment,” he said of the production cuts, “and it says there are problems.”

Malinowski and other Democrats said the president should go beyond simply expressing disappointment. He played Reps Sean Castane, D-Ill., and Susan Wilde, D-Pa. introduced a bill with the U.S. that required the withdrawal of American troops and defensive systems from Saudi Arabia and the United Arab Emirates.

The bill was more of a statement than anything since the Congress was out of session until the election, but Malinowski said he patterned it after a similar measure introduced by Republicans in 2020 and President Donald Trump on Saudi Arabia. Used to create pressure to reduce production at a time. When low oil prices were a concern.

Malinowski said Biden should similarly use the law to push the Saudis. “The point of our bill is to give him the ammunition he needs. I hope he uses it,” Malinowski said. “He took a risk. He put himself out there for this relationship, and that’s not how a friend should respond. So maybe they get some new friends.”

Written by Peter Baker. This article originally appeared in The New York Times.

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