Biden’s Choice After OPEC Cuts: Woo Saudi Arabia, or Retaliate?

Author: Yuvi October 7, 2022

Biden's Choice After OPEC Cuts: Woo Saudi Arabia, or Retaliate?


WASHINGTON — President Biden faces a dicey choice following the decision by the world’s oil giants to slash production just weeks before critical midterm elections that could turn on the price of gasoline: Should he stick with his policy of wooing Saudi Arabia or take measures to retaliate?

The announcement by the Saudi-led OPEC Plus energy cartel that it would pump two million fewer barrels a day was widely seen in Washington as a stab in the back of Mr. Biden, who just three months ago jettisoned his vow to make Saudi Arabia a “pariah” and traveled there to court the kingdom’s autocratic crown prince.

The question now confronting Mr. Biden is what to do about this seeming betrayal. In intentionally bland comments, he told reporters on Thursday only that he was “disappointed” and considering unspecified “alternatives.” But fellow Democrats, frustrated by what they see as the president’s excessive deference to the Saudis and eager to demonstrate toughness before their constituents head to the polls, increased pressure on Mr. Biden to punish Riyadh.

“He should just start withdrawing stuff,” Representative Tom Malinowski, Democrat of New Jersey, said in an interview, referring to the American military presence in Saudi Arabia. “That would get their attention. Action for action. Call their bluff. Do they really think they can trade their American security partner for a Russian security partner or a Chinese security partner? They know they can’t do that.”

Senator Chuck Schumer of New York, the majority leader, said Saudi Arabia’s decision to ally with President Vladimir V. Putin’s Russia to shore up oil prices was a grave mistake.

“What Saudi Arabia did to help Putin continue to wage his despicable, vicious war against Ukraine will long be remembered by Americans,” he said. “We are looking at all the legislative tools to best deal with this appalling and deeply cynical action.”

Mr. Biden gave little indication of how far he would go.

Asked about the production cut on Thursday, Mr. Biden said that “we are looking at alternatives” to oil from OPEC Plus countries. “We haven’t made up our minds yet,” he said.

His administration counseled caution, holding out hope that at the end of the day, the cut in daily production would in reality amount to maybe half of the two million barrel goal because some oil producers were already not meeting their targets. Rather than penalizing Saudi Arabia, Biden aides appeared focused more on countering its move by releasing more oil from the Strategic Petroleum Reserve and possibly seeking rapprochement with oil-pumping Venezuela.

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

The OPEC Plus decision could hardly have come at a worse time politically for Mr. Biden, who had staked his argument for the midterm campaign in part on falling gas prices. Ron Klain, the White House chief of staff, has methodically tracked the price at the pump for months as it has declined, and the Democrats felt renewed momentum as a result.

With the primaries over, both parties are shifting their focus to the general election on Nov. 8.

But gas prices had already begun inching back up even before the Saudi-led move, in part because of refinery issues on the West Coast and in the Midwest. The national average rose by seven cents to $3.86 since Monday as demand increased and stocks fell, although it remained far below the peak topping $5 a gallon in June.

The Saudis maintain that the production cut was not meant as a shot at Mr. Biden and have sent papers and charts to administration officials justifying it. With the price of oil falling just below $80 a barrel in recent days, the Saudis told American officials that they worried it would slide further into the $70s and possibly the $60s, making their own energy-dependent budget unsustainable.

How Times reporters cover politics. We rely on our journalists to be independent observers. So while Times staff members may vote, they are not allowed to endorse or campaign for candidates or political causes. This includes participating in marches or rallies in support of a movement or giving money to, or raising money for, any political candidate or election cause.

Biden administration officials fear the real crisis might come in December when a price cap organized by the United States to restrict Russian oil profits goes into effect and a European Union ban on the purchase of Russian crude is set to begin.

Mr. Biden’s options to counter the production cut are limited and carry trade-offs. He has already ordered more oil to be released from the Strategic Petroleum Reserve, but since the reserve is now at its lowest level in four decades, that risks shortages in case of war or a natural disaster like another hurricane.

He could push to limit exports of processed fuels like gasoline and diesel, which would expand supplies and lower prices domestically. But that would harm trading partners, particularly the European allies attempting to wean themselves off Russian energy and amplify global inflationary pressures.

The administration could open more federal lands and waters to drilling and softening regulations on drilling, exploration and pipeline laying to increase domestic production, although that could incite a backlash among environmentalists.

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

Easing sanctions on Iran and Venezuela could free up more than a million barrels of oil a day, which would help lower prices and potentially replace some of the Russian barrels now sold to Chinese and Indian refineries. But nuclear talks with Iran have stalled with scant hope of a breakthrough, and the prospects of a deal with Venezuela are murky.

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

In brief comments with reporters on Thursday, Mr. Biden did not deny a possible change toward Venezuela. “There’s a lot of alternatives,” 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, Mr. Biden said, “A lot.”

The president defended his decision to travel in July to Saudi Arabia, where he exchanged a fist bump with its de facto ruler, Crown Prince Mohammed bin Salman, despite a campaign pledge to isolate the kingdom for the killing of Jamal Khashoggi, a Saudi journalist and United States resident killed on what the CIA said were Prince Mohammed’s orders.

While not formally announced, American officials said privately at the time that they had an understanding that Saudi Arabia and other energy powers would ramp up production by fall.

But Mr. Biden insisted again on Thursday that he had other goals in going to Saudi Arabia, such as encouraging diplomatic relations with Israel.

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

“But it is a disappointment,” he added about the production cut, “and it says that there are problems.”

Mr. Malinowski and other Democrats said the president should go further than just expressing disappointment. He introduced a bill with Representatives Sean Casten and Susan Wild, Democrats from Illinois and Pennsylvania, requiring the removal of American troops and defensive systems from Saudi Arabia and the United Arab Emirates.

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

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

Clifford Krauss and Natalie Kitroeff contributed reporting.

7 October, 2022, 5:30 am

News Cinema on twitter News Cinema on facebook

Friday, 7th October 2022

More Stories
Powell says that rates will rise more and remain high ‘for some time.’
Life Science, Spacewalk Preps as Station Orbits Higher
NATO Nations Grow More Receptive to US Pleas to Confront China
Prince William and Kate Middleton land in Boston for US trip amid royal race row
New York Police Name a Chief Who Has Faced Internal Discipline
South Africa’s President, Cyril Ramaphosa, Faces Impeachment Hearing
Mother sparks furious debate after waxing her 10-year-old daughter’s face
Elon Musk’s Neuralink to share progress of its brain chip tonight
Sam Brinton: Biden’s nuclear waste guru spoke at a spanking seminar weeks after bag theft
Could Theatrical Movies Shut Out Streamers for the Top Oscars?
17 Public Employees Charged in Schemes to Steal Covid Relief Funds
Deaths From Substance Abuse Rise Sharply Among Older Americans in 2020
White House ‘deeply concerned’ about Paul Whelan
‘Philadelphia is a war zone’: thug strolls up to parking official and shoots him in the head
Indian-origin doc slams ‘racist joke’ at British Curry Awards
Argentina’s World Cup Hangs in the Balance Against Poland
China completes world’s largest solar telescope array with 1.9-mile-wide ring of 313 dishes
Bigg Boss 16 Day 60 Updates: Housemates call Nimrit unfair for favoring Shiv and Soundarya in ranking task
FIFA World Cup 2022: Defending champion France lost to Tunisia
Mariah Carey offers fans opportunity to stay in her apartment BUT the star won’t even be there
House PASSES bill to stop a rail strike on December 9 after Biden asked Congress to step in
In Georgia, Walker’s Pace in the Finish Worries Republican Allies
Hiroshi Miyamura, Given Medal of Honor in Korean War, Dies at 97
Cops kill Illinois man and his grandpa while trying to stop younger man from stabbing his relative
A Resonant Topic in Georgia’s Senate Runoff: Insulin Prices
Spotify Wrapped drops but Apple Music Replay fans have it trending
The five ‘saboteurs’ trying to derail Kevin McCarthy’s Speaker bid: GOP leader’s allies push back
Biden gives 11 tribes $135M to move coastal buildings to higher ground due to climate change
FIFA World Cup 2022: Lionel Messi’s Argentina qualification scenario ahead of must-win clash vs Poland
MDMA could be approved for PTSD in the US by 2024
Moment Litvinenko said he’d been poisoned recreated for ITVX drama widow says keeps his voice alive
Layoffs Hit CNN as Cost-Cutting Pressure Mounts
In a Show of Unity, House Democrats Elect Hakeem Jeffries Minority Leader
Hit by sanctions over Ukraine war, Russia turns to India for products in its key sectors
Abhishek Banerjee, on Amitabh Bachchan as his role model, says ‘I want to do what he did in Deewar’
Verdict in Trump Organization Trial Could Come Down to 3 Little Words
Twitter’s former head of security says platform is LESS safe under Elon Musk and decries layoffs
Some Rail Workers, Seeking Sick Days, Say Biden Betrayed Them
NYU Putting $1 Billion Into Its Engineering School in Brooklyn
Joe Root gives big update on health of England cricket team hit by viral infection in Pakistan, says THIS
Covid now mainly disease of elderly: NIne in 10 deaths are over-65
Vijay Hazare Trophy 2022: Swaroopam Purkayastha, Sibshankar Roy help Maharashtra beat Assam by 12 runs to enter final