The Road to Relevance
The recent decision by OPEC – led by Saudi Arabia and Russia – to cut oil output by 2 million barrels per day is a clear and shameful signal to the world that propping up a sanctions-strapped Russia is more important than maintaining its relationship with the United States and Europe.
Jarringly, this decision by the Saudis feels particularly punitive framed within the context of President Biden’s visit last month to Saudi Arabia, specifically to stand against such a cut in production, and comes only a few weeks prior to the November 8 midterm elections in the United States where high gasoline prices will easily drive more voters to the polls.
Historically, it is not at all that unprecedented for nations with massive oil reserves to instigate price wars through strategic cuts in production. Two and a half years ago, at the height of the pandemic, an oil price war broke out between Saudi Arabia and Russia. The Saudis wanted a cut in oil production because low global demand threatened to push down the price of oil below $40 a barrel. Russia refused to comply, sending the price of oil on a downward spiral.
The optics of cutting production in order to elevate pricing today becomes much more sinister when viewed through the lens of the Russian war in Ukraine.
The United States and its European allies have spent the last eight months sanctioning Russia hoping to change its calculus with Ukraine. One way is through targeting Russian oil and gas exports – a key driver of the Russian economy and the financing of its war effort.
By colluding with Russia to raise the price of oil to Russia’s advantage, Saudi Arabia demonstrates a worrying cynicism toward its relationship with the West and toward its own self-interest at nearly all costs.
In a co-authored editorial published by Politico last week, Senator Richard Blumenthal and Representative Ro Khanna said, “The shocking move will worsen global inflation, undermine successful efforts in the U.S. to bring down the price of gas, and help fuel Putin’s unprovoked invasion of Ukraine.”
These U.S. officials, and others, want to punish Saudi Arabia directly: cut off all U.S. military technology and arms sales, remove U.S. troops from the area, and even freeze all cooperation with Saudi Arabia. These measures come with their own set of concerns. Most urgently: opening the door to China to fill the void.
But if one thing is certain about Saudi Crown Prince Mohammed bin Salman it’s that the man is pragmatic and very much transactional. The West may forcefully disagree with his recent bro-hug with Putin, but that doesn’t mean it cannot make him regret it through a more strategic, transactional approach toward the Saudi leader rather than a more traditional equally punitive response.
Saudi Arabia desperately wants to be taken seriously as a modern, prosperous, technologically-advanced Western-facing nation. Maybe the best way for the U.S. to respond to their most recent affront is to remind them that the road to international relevance and Western modernization will never run through Russia.