Biden Saudi trip faces new scrutiny after OPEC cuts in oil

Saudi Arabia’s decision to join its partners in announcing an oil production cut on Wednesday is fueling fresh accusations over President Biden’s trip to the kingdom this summer, which officials hoped would improve Saudi relations across a range of issues, including the global supply of oil.

Some Biden administration officials bristled at the cut announced by the OPEC Plus cartel, seeing it as a direct affront to the president that threatens to hurt Democrats̵[ads1]7; standing in the 2022 midterm elections because it will raise gas prices.

U.S. officials are now grappling with how to respond to a potential price hike that could help fund Russia’s war in Ukraine, exacerbate major challenges facing the U.S. and European economies, and give Republicans a powerful new argument about inflation.

OPEC allies move to cut oil production, prompting fierce response from White House

A White House official called the OPEC decision a “disaster.” Another said administration officials saw the move as a deliberate provocation designed to boost Republicans’ chances so close to the election. Other officials said they did not interpret malice in the Saudi decision, but they saw it as a short-term effort to maximize oil profits despite the economic and geopolitical consequences.

Biden said Thursday that the cartel’s decision did not undermine the point of his July visit, but that it was still disappointing. “The trip wasn’t really for oil. The trip was about the Middle East and about Israel and the rationalization of positions, he told reporters. – But it is a disappointment.

National Security Council spokeswoman Adrienne Watson said Biden’s advisers had all agreed to the trip over the summer. “There was consensus across the president’s senior national security team about the importance of this trip to advancing US national security interests,” she said in a statement.

But that did not reassure critics of the Saudi government.

“They’re spitting in Joe Biden’s face,” said Dean Baker, a White House ally and an economist at the Center for Economic and Policy Research, a left-leaning think tank. “Whoever thought this trip was a good idea has some explaining to do.”

Even before Biden flew to the Middle East in July and fist bumped Saudi Arabia’s Crown Prince Mohammed bin Salman, the country’s de facto leader, White House aides knew the trip would bring criticism. Biden had declared that human rights would be at the “center” of his foreign policy, and he said he would make the oil-rich monarchy a “pariah.” But the president also remained acutely aware of the burden skyrocketing gas prices were having on middle-class Americans.

Biden’s top Middle East and energy aides, Brett McGurk and Amos Hochstein, pushed for the trip as a means of strengthening relations and improving Washington’s ability to project influence in the Middle East at a time when oil-rich states are exploring ties with Moscow and Beijing, according to U.S. officials and congressional aides, who spoke on condition of anonymity to discuss U.S. policy.

Administration officials had long been sharply divided over how to treat the oil-rich autocracy. Those favoring a cold-shoulder approach pointed to Saudi Arabia’s unpopular war in Yemen, Riyadh’s poor human rights record and the killing of Washington Post columnist Jamal Khashoggi as reasons to revise the relationship.

Biden goes to Saudi Arabia amid discomfort and criticism

Many officials in senior roles at the State Department and the US Agency for International Development also said they felt they had room to maneuver, given America’s growth as an oil-producing energy superpower. Creating a clean break with former President Donald Trump’s remarkably close relationship with the kingdom also had broad appeal among Biden’s political appointees.

Some US officials said concerns about the Saudi trip were shared by Secretary of State Antony Blinken, although the top diplomat ultimately supported and participated in the visit.

“Secretary Blinken fully supported the administration’s engagement with our regional partners about the diversity of interests we have,” State Department spokesman Ned Price said.

McGurk and Hochstein’s support for the trip began to gain favor in the White House in September 2021, when oil prices rose and resentment in the Gulf led the United Arab Emirates and Saudi Arabia to reject repeated U.S. requests to increase oil production, according to senior officials and congressional aides who are familiar with the matter. The defining moment for the push to approach the Saudis came when Russia invaded Ukraine on February 24, sending energy prices skyrocketing and reversing high gas costs, already a domestic political responsibility for Biden, to a geopolitical setback.

Some Democrats, already skeptical of US-Saudi relations, seized on the OPEC Plus decision to criticize the trip.

“I think it’s time for a reassessment of America’s alliance with Saudi Arabia,” Sen. Chris Murphy (D-Conn.), chairman of the Senate Foreign Relations Committee on the Middle East, told CNBC.

A Democratic congressional aide close to administration officials who, like others, speaking on condition of anonymity to discuss US policy, said: “This trip was hotly debated in the administration, and I don’t know how you can argue now that it wasn’t a mistake.”

White House officials have strongly denied that the purpose of the trip was to stimulate Saudi oil production. U.S. officials who favor U.S.-Saudi relations said critics misunderstood the goals of the visit and overestimated Riyadh’s ability to lower gas prices for average Americans. They also emphasized that Saudi Arabia is pumping 11.1 million barrels per day, a rate the country had not maintained recently.

But the OPEC Plus decision means increased production will end sooner than US officials hoped.

Energy analysts also say Saudi Arabia faced economic pressure to cut output as oil prices fell near $80 a barrel for about two weeks last month. U.S. officials argued to Saudi counterparts that the risk of letting the price fall below that point was minimal, but the Saudis would not budge, according to people familiar with the matter who spoke on condition of anonymity to discuss sensitive talks. Saudi officials did not immediately respond to a request for comment.

The trip’s defenders also said it was justified because of the other goals of the visit, which included strengthening a ceasefire in Yemen’s long-running civil war. Aid groups say the ceasefire, which was first agreed in April, reduced violence by as much as 60 percent. However, the warring sides recently failed to extend the six-month ceasefire, and US officials now fear a “return to war”, Tim Lenderking, the US special envoy for Yemen, told reporters on Wednesday.

On the trip, U.S. officials also worked to open Saudi airspace to flights serving Israel, and they pressed the United Arab Emirates to stop the construction of a Chinese military base — an effort that is ongoing.

Even the staunchest defenders of Saudi Arabia concede that the timing of the production cut was a major blow to the United States, and that it came despite strenuous objections from American diplomats who pressed their counterparts through the early hours of Wednesday morning to delay the decision. .

Biden recommits US to global alliances, ends support for Saudi-led war in Yemen in first major foreign policy speech

Biden officials across a broad swath of the administration — including the Energy Department, the State Department and the National Economic Council — raced Thursday to craft policy responses to the announcement. There are no obvious solutions. Energy officials have begun looking at a potential ban on U.S. fuel exports, although such a move would require the administration to abandon European allies that rely on U.S.-produced natural gas.

White House officials have also explored the possibility of easing sanctions on Venezuela to supplement some of the oil lost to OPEC production cuts. However, it’s a long shot: the US believes Venezuelan President Nicolás Maduro must engage with the Venezuelan opposition before any sanctions are lifted.

Sullivan and National Economic Council Director Brian Deese said in a statement Wednesday that they would consult with Congress on additional mechanisms “to reduce OPEC’s control over energy prices” — suggesting that U.S. policymakers may be interested in lifting a longstanding exemption from federal antitrust. law that enables the consortium to effectively coordinate prices. However, this measure would require congressional approval and face industry opposition, greatly reducing the likelihood of implementation.

Yasmeen Abutaleb contributed to this report.

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