Scoop: Saudis pressed Arab nations to publicly support OPEC+ cut
Add Axios as your preferred source to
see more of our stories on Google.
Saudi Energy Minister Prince Abdulaziz bin Salmand (2nd from left), Secretary-General of OPEC Haitham al-Ghais (right) and other officials hold a press conference on Oct. 5. Photo: Askin Kiyagan/Anadolu Agency via Getty Images
Saudi Arabia privately pressed several Arab countries to issue statements supporting the recent OPEC+ decision to cut oil production, according to a former U.S. official and an Arab official.
Why it matters: The goal of the Saudi push was likely to avoid being isolated by the U.S. and show that the decision, which angered the Biden administration, was a collective decision by all Arab nations in OPEC+.
The big picture: The Biden administration blames Saudi Arabia for the move, which the U.S. claims will strengthen Russia.
- Saudi officials claim the U.S. anger has nothing to do with Russia but is due to domestic political concerns about rising gas prices ahead of the midterm elections.
Catch up quick: Two weeks ago, OPEC+ announced production cuts of 2 million barrels per day starting in November.
- The U.S. lobbied OPEC+ members, mainly Saudi Arabia, to wait another month to evaluate the situation of the oil market before deciding on any cuts in production.
- Saudi Arabia, which leads the OPEC+ group, disregarded U.S. requests and went ahead with the production cut.
- The move created a crisis between the U.S. and Saudi Arabia, with the Biden administration announcing it was reviewing its relationship with Saudi Arabia and President Biden vowing to take action against the Saudis.
Background: OPEC, led by the cartel's dominant producer Saudi Arabia, began working with Russia and some allied producers on market management in the mid-2010s in response to the rise of U.S. shale production.
- The group adjusts output targets based on macro conditions as it looks to protect revenues and market share and prop up prices. But like any multilateral group, its decisions can be political too.
- Saudi officials insist the most recent production cut is a response to market forces, citing forces weighing on global demand growth including tightening monetary policies and China's COVID lockdowns.
- But U.S. officials argue there was no firm market rationale and that the move provides aid to Russia. White House National Security Council spokesperson John Kirby said last week that the move would "increase Russian revenues and blunt the effectiveness of sanctions."
Behind the scenes: In an attempt to push back on U.S. accusations, Saudi officials in recent days approached Arab countries that are OPEC+ members and several Arab countries that are not, and asked for public statements of support.
- An official from one of the Arab countries said the Saudi pressure was on a very high level and the Saudis pressed very hard.
- A former U.S. official briefed on the issue said Saudi officials pressed Arab countries to echo their message that the OPEC+ decision was purely an economic one and based on market conditions and not political.
State of play: Iraq, Kuwait, Bahrain, the United Arab Emirates, Algeria, Oman, Sudan, Morocco and Egypt all issued statements stressing the decision was made in consensus and was technical, not political.
- Jordan also issued a statement of support for Saudi Arabia but called for a direct dialogue between the U.S. and Saudi Arabia to solve the crisis.
What they're saying: A spokesperson for the Saudi Embassy in Washington declined to comment.
- But the Saudi Embassy tweeted a statement on Monday stressing it views the relationship with the U.S. as strategic and that the OPEC+ decision was based on economics, not politics.
Go deeper: Biden's new Saudi strategy
Axios' Ben Geman provided additional reporting to this story.
