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Saudis pressure Arab countries to openly support OPEC+ cut

OPEC Secretary General Haitham al-Ghais (right) and Saudi Arabian Energy Minister Prince Abdulaziz bin Salman Al-Saud (2. L) hold a press conference.

Saudi Energy Minister Prince Abdulaziz bin Salmand (2nd from left), OPEC Secretary General Haitham al-Ghais (right) and other officials held a press conference on 5 October. Photograph: via Askin Kiyigan/Anatolian Agency Getty Images

According to a former US official and an Arab official, Saudi Arabia specifically pressured several Arab countries to make statements in support of OPEC+’s recent decision to cut oil production.

Why is it important: The purpose of the Saudi attack was probably to avoid isolation by the United States and to show that the decision that angered the Biden administration was the joint decision of all Arab nations in OPEC+.

Big picture: The Biden administration blames Saudi Arabia for the move, which the US claims will strengthen Russia.

  • Saudi officials claim that US anger has nothing to do with Russia, but stems from domestic political concerns over rising gas prices ahead of the midterm elections.

Quickly catch: Two weeks ago, OPEC+ announced 2 production cuts million barrels per day as of November.

  • The US lobbied OPEC+ members, primarily Saudi Arabia, to wait another month to assess the state of the oil market before making any decision to cut production.
  • Leading the OPEC+ group, Saudi Arabia continued its production cuts, ignoring the demands of the USA.
  • The move created a crisis between the United States and Saudi Arabia when the Biden administration announced that it was reviewing its relationship with Saudi Arabia and President Biden promised to take action against the Saudis.

Background: Led by the cartel’s dominant producer, Saudi Arabia, OPEC began working with Russia and some allied producers on market management in the mid-2010s in response to an increase in US shale gas production.

  • The group adjusts output targets based on macro conditions as it appears to maintain revenues and market share and support prices. But like any multilateral group, its decisions can be political.
  • Saudi officials say the latest production cut is part of reaction to market forces, citing forces weighing on global demand growth, including tight monetary policies and China’s COVID lockdowns.
  • However, US officials argue that there is no clear market logic and that the move provides aid to Russia. White House National Security Council spokesman John Kirby said last week that the move would “increase Russian revenues and reduce the effectiveness of sanctions.”

Behind the scenes: In order to repel the accusations of the USA, Saudi officials have appealed to Arab countries that are members of OPEC+ and some non-member Arab countries in recent days, asking the public to express their support.

  • An official from Arab countries said that the Saudi pressure was very high and the Saudis were putting a lot of pressure.
  • A former U.S. official briefed on the matter said Saudi officials pressured Arab countries to repeat their message that the OPEC+ decision is purely economic and based on market conditions, not politics.

Game Status: Iraq, Kuwait, Bahrain, The United Arab Emirates, Algeria, Oman, Sudan, Morocco and Egypt made statements emphasizing that the decision was technical, not political, and was taken unanimously.

  • Jordan also issued a statement of support for Saudi Arabia, but called for direct dialogue between the United States and Saudi Arabia to resolve the crisis.

What they say: A spokesperson for the Saudi Embassy in Washington declined to comment.

  • However, the Saudi Embassy tweeted out He stressed on Monday that he views relations with the United States as strategic and that the OPEC+ decision is based on economics, not politics.

Go deeper: Biden’s new Saudi strategy

Axios’ Ben Geman provided additional reports on this story.

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