(Bloomberg) – A growing public dispute over oil between the Biden administration and Saudi Arabia risks causing irreparable damage to U.S. relations with the crucial Middle Eastern partner, according to current and former government officials briefed on the feud. .
Duel statements from Washington and Riyadh in recent days over OPEC+’s decision to cut production last week underscore how far U.S.-Saudi relations have deteriorated under President Joe Biden, with each side blaming the other. to act in bad faith.
Saudi Arabia said the cuts were an attempt to dampen market volatility, stressing that relations with the United States must be based on trust. A statement from the White House on Thursday sneered at what it called Saudi Arabia’s attempt to “turn or deflect”. Secretary of State Antony Blinken echoed Biden’s warnings that the decision would have “consequences.”
The remarkably public setback reflects growing impatience within the White House now that it has little to show for Biden’s outreach to the Saudis – something he was forced to do as prices prices were skyrocketing over the summer, despite his campaign promise to treat Crown Prince Mohammed bin Salman as an “outcast”.
This frustration is shared by the Saudis. A Gulf official said there was a real sense of grievance that the United States did not help Saudi Arabia during times of low oil prices, but is asking for its help now that it wants to prevent the prices to rise ahead of the US midterm elections next month and amid the fight to deprive Russian President Vladimir Putin of oil revenue.
Another official from the Gulf region insisted that despite the US complaint that Saudi Arabia is helping Russia in its war against Ukraine, the cut in oil production is actually aimed at balancing supply and demand – and to serve their own economies without causing international harm.
The two sides now appear to fundamentally misunderstand each other, according to current and former officials in the United States and the Gulf, several of whom requested anonymity because they were not authorized to speak publicly. A person familiar with the dispute said he was appalled that the White House had responded with such anger, suggesting the United States should have taken the high road.
“Irrecoverable” relationship
“They have once again personalized the issue, which will lead to another humiliating descent when they need something from Saudi Arabia,” said Kori Schake, director of foreign policy and defense studies at the ‘American Enterprise Institute, about the American position. “They would have been smarter to have pointed out that Saudi Arabia frequently denies US requests to use oil as a political tool, when the Saudi economy is entirely dependent on it and has a primary interest in price stability.”
“The relationship is probably beyond repair,” Schake said.
Hopes for resuscitating the relationship rest on the security and energy ties and the fact that, despite all the public accusations, neither side wants to completely sever those contacts. The United States and Saudi Arabia have a long history of intelligence sharing, and the United States sent what US officials called a significant number of Patriot anti-missile interceptors to Saudi Arabia in May.
Despite some calls in Congress to limit Saudi purchases of US arms, the administration is pushing back on any restrictions on arms sales to the kingdom, said Scott Modell, chief executive of Rapidan Energy Group. As unhappy as the Saudis may be with delays in delivering US weapons or assistance due to the war in Ukraine, “they have to smile and put up with this”, because nothing replaces the United States when it comes to defense and security, he said.
For now, however, talking to the United States is a punishment, not a rapprochement. Officials say Biden is weighing his options for how best to respond.
“NOPEC” legislation
One possibility is a bill known as NOPEC, legislation that would allow the United States to sue OPEC producers for manipulating the energy market. The Biden administration already plans to sell at least 165 million barrels of crude through November from U.S. reserves to combat rising prices. Biden could order more oil releases and try to drive the price of oil further down.
A former US official, who still speaks to the current administration and asked not to be identified, said the administration had few options that would change the crown prince’s calculus.
And regardless of the security implications, some members of Congress are growing increasingly impatient, seeing arms sales as an important way to demand retaliation, whether the White House likes it or not.
“For us at this time, having a long-time partner like Saudi Arabia to help Russia finance its war of aggression against Ukraine has been a very bitter disappointment and a big surprise,” CNN told Friday. Senator Chris Coons, a Democrat from Delaware. “I think you’ll see both the administration and the Senate take action, and one of the most likely actions is to stop any future arms sales.”
The Saudi military is made up of 75% American equipment, including high-end systems such as fighter jets, said Bruce Riedel, senior fellow at the Brookings Institution and director of the Brookings Intelligence Project. This equipment depends on the support of American contractors and spare parts, providing an obvious point of leverage for Washington.
Consequences such as the threat to end arms sales would also mark a boost in Biden’s politics. The United States imposes some restrictions on sales of precision-guided munitions, but the Biden administration generally eased restrictions on its rhetoric early on, according to a congressional aide.
At the same time, while Saudi Arabia may wish to keep in touch, the episode is also a reminder of how much the US relationship with the Middle East has changed. Gulf countries have shown an increased willingness to challenge or defy the United States as they seek other partners such as China.
“I can’t imagine a greater humiliation – both in terms of his domestic political stance and his efforts for unity on the international stage with Ukraine and Russia – than what MBS has done” to the US President said Aaron David Miller, senior fellow at the Carnegie Endowment for International Peace. “At a minimum, he didn’t really care about the impact on Joe Biden.”
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