President Joe Biden promised to unleash “consequences” against Saudi Arabia for the decision by OPEC+ to cut oil production, but after weeks of blistering rhetoric, the tensions that exploded publicly have retreated to a simmer as the White House navigates the blowout.
For the Biden administration, the cut placed the kingdom squarely in line with Russian President Vladimir Putin, with an increase in oil prices set to boost funding for the war in Ukraine while undermining U.S. sanctions. And it flew in the face of the president’s expectation that a controversial visit to Saudi Arabia this summer would lead the kingdom to boost production.
Yet Biden’s press secretary suggested Tuesday that Saudi Arabia had taken steps to garner the White House’s approval as the president mulls his response.
Saudi Arabia’s $400 million pledge to Ukraine and vote against Russia at the United Nations “are noteworthy … and will inform our consultations and review,” Karine Jean-Pierre told reporters Tuesday, though she noted that the steps “do not compensate” for the cut.
“We’re watching to see what Saudi Arabia does over the coming weeks,” she added.
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When Biden delivered remarks on energy security last week, the president did not invoke Saudi Arabia and blamed rising prices on oil refiners and Putin.
White House officials have lately downplayed OPEC’s decision to slash oil production by 2 million barrels per day, noting that the number of actual barrels may be closer to 500,000.
“The impact on the market is not going to be as significant,” Biden’s top energy adviser, Amos Hochstein, told CBS News’s Face the Nation over the weekend. OPEC’s decision was “more of a big, political statement,” he said.
At a conference organized by the Saudi Public Investment Fund on Tuesday, Saudi foreign investment minister Khalid al Falih downplayed the dispute, which he referred to as “a blip.”
“We’re very close, and we’re going to get over this recent spat that I think was unwarranted, but it was a misunderstanding, hopefully,” Falih said.
Not even a report that Saudi Crown Prince Mohammed bin Salman “mocks President Biden in private, making fun of the 79-year-old’s gaffes and questioning his mental acuity,” could prompt the White House’s rebuke. Asked about the Wall Street Journal’s reporting, Jean-Pierre declined to comment.
A day later, Jean-Pierre stressed the decadeslong nature of the U.S.-Saudi relationship, telling reporters that the president would “strategically think through” how to respond to the recent OPEC+ production cut.
“He’s going to take his time to consult with members of both parties, with partners, allies, and with the Saudis, as well,” she said.
Asked on Tuesday about Saudi criticism that Washington is using oil releases to “manipulate markets,” Biden, receiving a COVID-19 vaccine at the time, responded with a laugh before telling reporters to get a booster.
The apparent drop in temperature suggests the White House is carefully calibrating its approach, said Ali Shihabi, a Saudi national in Washington close to Mohammed, the kingdom’s de facto ruler.
“With oil prices having dropped since the Vienna meeting, I think the White House may be coming around to see what OPEC did as market-related and not political,” Shihabi told the Washington Examiner.
Saudi Arabia has argued that market conditions drive its production decisions and accused the White House of seeking to delay the latest cut for political reasons ahead of the U.S. midterm elections.
Still, significant tensions remain as Democrats urge Biden to adopt a stronger stance against Saudi Arabia, halting arms sales, for instance, and as prominent Saudi officials push back on the U.S.
Comments by Energy Minister Prince Abdulaziz bin Salman at the Future Investment Initiative conference earlier in the day swiped at the release of emergency oil reserves and framed OPEC’s decision as a sovereign economic matter.
“We keep hearing, ‘You are with us or you are against us,’” Abdulaziz said. “Is there any room for: ‘We are for Saudi Arabia and for the people of Saudi Arabia’?”
He warned that using “emergency stocks” oil “may be painful in the months to come.”
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An OPEC meeting in December is expected to be the next test for the U.S.-Saudi relationship, with the White House waiting to see whether the group increases production.
Scheduled to occur shortly before the U.S. and Western allies announce new sanctions on Russia, including a partial embargo on Russian oil, a decision by Saudi not to make up anticipated supply cuts could severely drive up energy prices.
