White House faces oil standoff with Saudi Arabia and UAE as prices soar | american foreign policy


Joe Biden’s hardline stance on Russia has won him widespread applause, but with the most severe oil shock in decades now a reality, the US president’s bid to cushion the blowback continues to meet resistance from both allies he needs most.

Saudi Arabia’s de facto ruler Mohammed bin Salman and his UAE counterpart Mohammed bin Zayed have yet to agree a phone call with the West’s most powerful man – a scenario almost unthinkable under previous administrations.

Biden’s immediate priority is for both countries to help exert maximum economic pressure on Russia by increasing their oil production. Each capital is a major oil supplier, with excess capacity, which would mitigate the effect on US consumers through fuel prices ahead of the midterm elections in November that threaten Democratic control of Congress.

With relations between the Middle Eastern oil powers and Washington at a modern low, a settling of scores is due that could realign the regional order on terms favorable to Riyadh and Abu Dhabi. Both leaders have made it clear they won’t settle for anything less and are ready to reap the rewards.

As if to show the Biden administration what it can do, UAE Ambassador to Washington Yousef al-Otaiba said last Wednesday that he supports production increases “and will encourage OPEC to consider higher production levels,” leading to a 13% drop in oil prices. % the next day. But no action to increase supply followed and by the end of the week the price per barrel had recovered to almost $130 (£100), an uncomfortably high level for Biden to hit at the midpoint.

However, the stalemate involves much more than oil. In Riyadh, Prince Mohammed feels snubbed by Biden’s refusal to engage with him since taking office. The murder of Saudi dissident Jamal Khashoggi by the crown prince’s security aides, the war on Yemen, the jailing of rights activists and the boycott of Qatar have made him a pariah for the administration.

Disputes with Abu Dhabi are almost as harsh. The United States was particularly taken aback by the UAE’s repeated abstentions from the UN Security Council, which were seen by Western diplomats in New York as a quid pro quo for Russian support for some of the anti-Houthi positions that he wanted the council to take over. the war in Yemen.

Saudi Arabia and the United Arab Emirates have been furious that the Biden administration removed the Iran-backed Houthis from the list of global terrorism as they continue a series of painstaking negotiations with Iran to revive the agreement Obama-era nuclear bomb shredded by Donald Trump.

Beyond that, however, there is a strong sense in both capitals that Biden has approached the region with a deeply critical view of countries that have long been security allies, and soft on Iran, which remains an enemy.

After trying last week to recruit Venezuela to the cause of Russia’s isolation, the White House sees efforts to repair relations with Saudi Arabia and the United Arab Emirates as an acceptable price to pay.

In February, the administration sent Brett McGurk, the White House coordinator for Middle East policy, and Amos Hochstein, the State Department’s special energy envoy, to Riyadh for a meeting with the Heir prince. On the eve of the invasion of Ukraine, the Treasury announced sanctions against an alleged financing network of the Houthis.

Sir John Jenkins, a former British ambassador to Riyadh and a senior fellow at Britain’s Policy Exchange think tank, said the ties that had grown between Riyadh and Moscow, particularly since Biden sidelined Prince Mohammed, probably needed to be recalibrated. if a reset should take place.

“I think it’s very complicated,” he said. “I wouldn’t make a one-sided bet on Putin myself. But that is how the Saudi position in particular will appear to many in DC. It will only piss people off. And encourage them in turn to bet on Iran instead. You have to face [Prince Mohammed]. But if he demands a full run down of Biden, I don’t think he’ll get it.

“There must be a way to square this circle. A renewed American promise to defend Saudi Arabia [Saudi Arabia] and UAE from Iran is one way. The redesignation of the Houthis and a renewed commitment to settling Yemen in a way that suits Riyadh and Abu Dhabi is another. But I don’t see Biden saying he’s just going to forget about Khashoggi.

“Personally, I don’t think Russia matters much to Saudi Arabia. China is much bigger. Beijing wants to avoid a collapse in global trade – or a prolonged Western recession. And there are signs that Beijing is trying to position itself appropriately. The risk is then that a hard line from Riyadh will turn against him.

Robin Mills, CEO of UAE-based consultancy Qamar Energy, said increasing oil supply, and therefore reducing tanker prices, was a relatively simple technical process, but carried a risk. political and economic relations with the world oil body Opec, of which Riyadh and Abu Dhabi are members.

“They could increase supply in a month and reach full capacity in 90 days,” he said. “Opening chokes wells, restarts wells entirely, restarts perhaps gathering and production stations.

“Everyone has always cheated on OPEC deals when it suited them. Can you do it fast? Not tomorrow, definitely. But unless something goes really wrong, KSA should be able to make a difference of three This in itself would help – to some extent – ​​to calm the oil markets.”


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