US Senator demands 'freeze' on Saudi Arabia cooperation after OPEC announces oil cuts

The cartel of OPEC+ (Organization of the Petroleum Exporting Countries) member countries decided to slash oil production by two million barrels per day, on October 5. This is the largest oil cut since the start of the pandemic. The move is quite strategic and poses a challenge to the US as it comes a month away from the US midterm elections and as Brent crude is nearing 100$ per barrel.

Senator Bob Menendez of New Jersey slammed Saudi Arabia's move to slash oil production. On October 10, Menendez said ''this decision would serve to "underwrite" Russian President Vladimir Putin's unprovoked war in Ukraine.

"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 off an entire country off of the map, or you support him, the US Senator asserted and added ''the Kingdom of Saudi Arabia chose the latter in a terrible decision driven by economic self-interest."

Menendez further stated “The US 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 Chairman of the Senate Foreign Relations Committee, I will not green-light any cooperation with Riyadh until the Kingdom reassesses its position with respect to the war in Ukraine. Enough is enough,” he added.

OPEC and oil prices

On October 5, OPEC+ member countries held a meeting in Vienna. It was the first in-person meeting since the onset of the COVID-19 pandemic. Their justification for the production cuts was to stabilise the markets, however, most experts believe that this move is to drive up the prices. As supply and prices share an inverse relationship, it can be seen how OPEC and its allies are cutting the supply to drive the prices up. 

Prince Abdulaziz Bin Salman Al-Saud, Saudi Arabia Minister of Energy said, “Our priority now is stabilising the market. Now we could be accused of wanting to influence the market in a negative way as everybody’s productive view and others will see how we conduct ourselves in the months to come.''

‘Turning point’ in US-Saudi relationship

Oil prices almost rose to 120$ per barrel when Russia invaded Ukraine. By slashing oil production, OPEC countries are building a cushion against an impending economic crisis. In July, Joe Biden visited Saudi Arabia with an aim to increase oil production. However, now Russia and its allies have ganged up against the US. The White House called this decision short-sighted.

White House Press Secretary Karine Jean-Pierre said, “OPEC’s decision to cut production quotas is short-sighted while the global economy is dealing with the continued negative impact of Putin’s invasion on Ukraine. It is clear that OPEC is aligning with Russia with today’s announcement. OPEC did not condemn the Russian influence, but now they are siding with Putin by cutting off oil supply.”

This is a clear message to the US. The US would have to release its oil reserves to maintain supply. The US is proposing NOPAC (No Organisation of the Petroleum Exporting Countries). Prior to this, the OPAC countries enjoyed a certain degree of autonomy; now on, with NOPAC, the US aims to change this. This Bill had been under process for two years, but now it will be passed.

(With inputs from ANI)

Image: AP