On Wednesday, the energy price-fixing cartel OPEC+ announced that it was making a major reduction in oil production. That will end up meaning less oil on the market, and an increase in the price of gasoline for consumers worldwide, at a time of high inflation and recession fears. It is a net positive, though, for the two countries that produce the most oil in OPEC+ — Russia and Saudi Arabia.
President Joe Biden has called the move a “disappointment.” Perhaps more accurately, it’s an embarrassment for an American leader who has sought to enhance relations with the kingdom after a rough start. On top of that, it’s a sign of the limits of America’s ability to determine the global landscape amid its ongoing proxy war against Russia in Ukraine, in which Saudi Arabia has played both the US and Russia against one another.
For weeks in advance of the OPEC+ announcement, key personnel from the Biden White House were scrambling to convey to Saudi Arabia, the group’s most influential member, “how high the stakes are,” a US official told CNN.
The administration’s failed pressure campaign comes about three months after Biden’s first visit to the kingdom as president. That trip was significant because Biden had initially distanced himself from Saudi Arabia. For his first 18 months in office, he had informally decided not to meet Prince Mohammed bin Salman bin Abdulaziz, or MBS, building on his commitment during the presidential campaign to ostracize Saudi Arabia.
There was good reason to avoid MBS: The CIA had determined that he had ordered the killing of Washington Post writer Jamal Khashoggi in 2018, and since the Obama administration the Saudi prince had deepened a vicious war in Yemen. But eventually, Biden capitulated to a visit.
While in Saudi Arabia this summer, senior Biden officials argued that the Saudi trip was not only or even mostly about oil, even as gas prices in America in the spring had hit near-historic highs. They provided myriad reasons Biden went: for Israel’s security, for regional security, and to reestablish a partnership with Saudi Arabia that would prove practical as crises hit in various parts of the world. The trip, the Biden administration wanted us to believe, was about everything but oil. It was a contradiction in terms, however. Much of Saudi Arabia’s geopolitical clout and power stems from its massive oil reserves and the wealth that comes with it.
Saudi Arabia did not commit to pumping more oil in response to Biden’s visit to the country, and has spurned the US again. It’s not the first time that the US has had difficulty securing Saudi Arabia’s support. Of course, the OPEC cartel has a fraught history with the US. Today, the energy market amplifies the geopolitical power of the kingdom and a few other oil producers, even as its members like Russia and Saudi Arabia don’t always agree.
As the impact of the OPEC+ announcement reverberates, one has to ask: Why is the US so naive about Saudi Arabia?
Look who’s around Biden
One answer relates to a Washington adage that often bears repeating: Personnel is policy. In the case of US policy toward Saudi Arabia, two important figures in Biden’s orbit represent the worldview that MBS, despite all indications to the contrary, can be managed and that Saudi Arabia is too important to break up with. Those two figures — the White House’s top Middle East adviser, Brett McGurk, and senior State Department energy official Amos Hochstein — have been shuttling to Saudi Arabia on Biden’s behalf.
McGurk has described Biden’s Middle East approach as “back to basics,” in essence doubling down on some of the bipartisan articles of faith in US foreign policy, like the US dependence on petro-states in the Middle East, notably Saudi Arabia, and the need to work with non-democratic rulers for broad strategic goals beyond oil, like regional stability.
McGurk has served as a Middle East official in the administrations of Biden, Donald Trump, Barack Obama, and George W. Bush. (In 2004, the Atlantic dubbed McGurk “one of the real stars of the occupation” of Iraq.)
He has called himself “a friend of Saudi Arabia,” as I’ve previously noted. “Look, I’ve worked with MBS, and he actually is someone who you can reason with,” he said in 2019. At the time, he was in the private sector as a board director of the military tech company Primer, whose early major investor was a sovereign wealth fund of the United Arab Emirates, another Gulf autocracy that has close ties to Saudi Arabia.
Hochstein, for his part, worked as a senior energy official in Obama’s State Department and worked closely with then–Vice President Biden. From 2017 to 2020, he worked as a senior executive at the Houston-based energy company Tellurian and as an advisory board member to Naftogaz, Ukraine’s biggest national energy company.
One aspect of his career that is worth surfacing is his work as a lobbyist for oil and gas companies. In the mid-2000s, he served as a close adviser to President Teodoro Obiang Nguema of the autocratic petro-state Equatorial Guinea for $120,000 monthly. “I’m proud of all the clients I’ve represented. I haven’t done anything that would make it hard for me to look my daughter in the eye,” he said in 2006. Obiang remains in power and is as repressive as ever.
The US has since the days of FDR been a patron and partner of Saudi Arabia’s, but new policies are needed.
Both advisers to Biden seem to have overestimated the extent to which they could cajole the Saudi prince toward an outcome that would mean more gasoline and lower prices for American consumers. Their hopes of swaying MBS have now been disproven more than once.
It highlights another crucial point: Beyond keeping gas prices low, the Washington establishment is struggling to craft a foreign policy that meets the challenges of an increasingly multipolar world.
American power isn’t what it once was
While the post-Cold War moment of American primacy in the world has at times been overstated, not enough policymakers recognize the reality of America’s comparative decline.
The Biden administration, and Washington more broadly, has not yet come to terms with how diminished American power is in the world. Part of that decline was self-imposed — Trump’s capricious presidency deliberately avoided taking on a steadying global role, and decades of intervention in the Middle East sapped America’s geopolitical power. Other parts are more structural, like the relative weakening of the US economy since the great recession, and the expanding power of China economically and geopolitically.
Shortly after Biden’s Saudi visit, I spoke with Chas Freeman, who served as ambassador to Saudi Arabia from 1990 to 1992. He emphasized that Biden departed from Saudi Arabia without any guarantees on oil. “We don’t necessarily call the shots anymore. So if you wanted a demonstration of the limitations of American power, this was it,” he told me. “We are no doubt the most powerful country in the world militarily, but that doesn’t buy us the influence it once did.”
The OPEC+ announcement this week is similarly a stark demonstration of that reality. Though the US sells Saudi Arabia a preponderance of military hardware that it depends on for its own security, it is not enough to buy its cooperation in energy policy.
Higher oil prices are in Russia and Saudi Arabia’s common interests. And now it’s clear that MBS’s own interests will always guide his policy. Russia and Saudi Arabia “have a greater confluence of interest on the price of a barrel of oil than does the United States and Saudi Arabia on human rights,” Steven Cook, a Middle East expert at the Council on Foreign Relations, told me in July.
That convergence of interests does not necessarily mean that MBS and Russian President Vladimir Putin are aligned as allies beyond energy prices. But they are the two largest non-US oil producers in the world. If that’s the only thing they agree on, then that’s still quite a lot.
The great question that has faced US policymakers is what leverage the US has over Saudi Arabia to affect its policies, and whether limiting or halting arms sales to the country or passing a bill to constrict OPEC’s influence would have an effect.
Sanctions have become the tool of choice for addressing Russia’s brutality in Ukraine. But in Biden’s first days in office in 2021, the administration chose not to directly target MBS with sanctions over Khashoggi’s murder. It was an admission that Biden needed Saudi Arabia’s cooperation on broad strategic issues, from Israel to Iran. That lack of accountability may have further emboldened the crown prince.
One card that Biden held was not meeting directly with MBS, though that was discarded this summer, with little to show for it.
Many experts in the Washington establishment argued that Biden meeting MBS was pragmatic, even smart, policy. “Cut Biden some slack,” wrote columnist Max Boot in the Washington Post. “Give Biden some credit,” several prominent former US military and intelligence leaders urged in a policy memo for the Middle East Institute. “Don’t be distracted by the fist bump,” said former adviser to the Trump White House Kirsten Fontenrose. “This trip was, at its root, Biden keeping a promise to Saudi Arabia that he would come to the kingdom himself if oil production was accelerated in July and August.”
But it really doesn’t look like a brilliant foreign policy move in hindsight, if even the bare minimum ask of getting Saudi Arabia to pump more oil hasn’t been met. The “royal Saudi family has never been a trustworthy ally of our nation,” tweeted Sen. Dick Durbin, the No. 2 Democrat in the chamber. “It’s time for our foreign policy to imagine a world without their alliance.”
But that’s a difficult stretch of the imagination for many in Washington.
“The Biden administration recognizes that they can’t, or perhaps they won’t, try to influence Saudi oil policy. Saudi is going to make decisions about oil production based on Saudi interests,” Gregory Brew, a historian at Yale’s Jackson School of Global Affairs, told me. “I think they’re naive, because they don’t seem to recognize that the US does actually have leverage over Saudi Arabia.”
Original News : https://www.vox.com/world/2022/10/7/23391575/opec-oil-prices-biden-naive-saudi-arabia