OPEC benefitted Russian President Vladimir Putin, says POTUS
Washington: Taking a confrontationist stand, the United States of America today termed the Organization of the Oil Producing Countries, “OPEC cartel”.
The US is upset after the 45th Meeting of the Joint Ministerial Monitoring Committee (JMMC) and the 33rd OPEC and non-OPEC Ministerial Meeting in Vienna on October 5, 2022, decided to adjust downward the overall oil production by 2 mb/d from the August 2022 required production levels, starting November 2022 for OPEC and non-OPEC participating countries; and decided to reconfirm the baseline adjustment approved at the 19th OPEC and non-OPEC Ministerial Meeting.
OPEC’s decision has seriously impacted the USA – Saudi Arabia relationship. Saudi Arabia controls about one-third of OPEC’s total oil reserves and plays a leading role in the organization. Prior to the meeting, the US conveyed a consistent message to the Saudis: energy supply needs to meet energy demand. Those engagements with Saudi Arabia intensified with Russian President Vladimir Putin’s aggression against Ukraine and the implications for the energy market that it engendered.
“We have made the point repeatedly that we have a multiplicity of interests with Saudi Arabia; energy is one of them. And in the context of those discussions regarding energy, we have had senior members of the administration travel to Saudi Arabia in recent months…This is engagement that took place over the course of many months, and it took place over the course of many months because we wanted to send a clear and consistent message that energy supply needed to meet energy demand, and especially at this moment, this moment where the global economic recovery is ongoing but has the potential to endure setbacks from the headwinds that we’ve discussed and any additional headwinds that would come from an announcement like this one,” the US State Department spokesperson Ned Price told reporters today (IST).
The OPEC+ decision made American President Joe Biden state last night (IST) that he agreed that the relationship with the Saudis has to be recalibrated, even as the Saudi foreign minister stressed yesterday (IST) that the OPEC+ decision was based on the oil market needs, not on politics, and Saudi Arabia didn’t stand with Russia against the US.
The US, however, claimed that the OPEC+ decision “does and will” work to the benefit of President Vladimir Putin, of Russia in the near term. It may well elevate energy prices, especially for those lower- and middle-income countries, those countries that are not as resilient to price shocks, and price changes as the United States, and the countries that don’t have the same domestic energy infrastructure that the US has, those countries that are not in a position to produce 500,000 – hundreds of thousands of barrels of oil per day domestically.
“Our contention – and this is not a contention that we are alone in sharing and holding – is that energy supply needs to meet energy demand. In our estimation and the estimation of countries around the world, what the OPEC cartel announced last week does not comply with that core principle. It’s not only a core principle of energy, it’s a core principle of economics that supply needs to meet demand. We are in an especially perilous – fragile, I should say – environment, a fragile economic recovery, an economic recovery that is facing continued headwinds – headwinds from COVID, headwinds stemming from President Putin’s aggression against Russia and the implications it has had in terms of not only energy prices but food prices, commodity prices, some of the other supply chain issues that have resulted from it,” Price said.
The US claimed that over the longer term, the OPEC+ decision will neither work to the interests of Saudi Arabia nor will it work to the interests of Russia. “It will not be in the interests of any other member of the OPEC cartel. And that’s principally because this decision is just another reminder of what we have known for some time now, that we need to – we must – lessen our dependence on foreign supplies of oil. We must become more dependent on what we’re able to produce from ourselves, what we are able to do with our allies and partners, and ultimately to accelerate the transition to renewables. This is a decision that will only accelerate all of those processes, and that ultimately won’t work to the benefit of President Putin.”
Given the decision of OPEC+, various proposals are now being floated from Capitol Hill to change the defence posture or freeze it or review it without affecting the American situation vis-à-vis Iran. Democratic Senator Richard Blumenthal and Representative Ro Khanna have gone to the extent of suggesting to hold arms sales and deliveries to the Saudis for something like 10 months.
Price said there were a number of members on the Hill who have very strong opinions in terms of what the U.S.-Saudi relationship should look like. “…our goal is to see to it that our relationship with Saudi Arabia is calibrated and recalibrated in such a way that it is most effectively serving our interests. This is a relationship that, over the course of years, has not always effectively served our interests. We want to make sure that going forward, we have a relationship that is sustainable and a relationship that ultimately redounds to the benefit of Americans and the benefit to our interests in the region.”
Meanwhile, considering the US was just about a month away from the midterm elections, there were speculations about what if the balance at the Capitol or in the Congress changed in November. Price though claimed that “This is something to us that transcends politics. This is about core national interests, and those core national interests don’t depend on who is in the Capitol, they don’t depend on domestic politics here at home”.
– global bihari bureau
