The United States and Saudi Arabia will overcome the recent rift in relations created by the OPEC+ group's decision to reduce its oil production target by the most since 2020, according to Saudi Arabia's Investment Minister Khalid al-Falih.
"If you look at the relationship with the people side, the corporate side, the education system, you look at our institutions working together. We are very close and we will get over this recent spat that I think was unwarranted," al-Falih, who was Saudi Arabia's Energy Minister when OPEC+ was created, said at the Future Investment Initiative (FII) forum in Riyadh, as carried by Reuters.
Early this month, OPEC+ decided to reduce its crude oil production target by 2 million barrels per day (bpd) as of November-a cut which angered the U.S. Administration.
There will be some consequences for Saudi Arabia for its decision with Russia to steer OPEC+ into a large oil production cut, U.S. President Joe Biden told CNN in an exclusive interview a week after the OPEC+ meeting.
Saudi Arabia, for its part, came out with a statement that expressed "its total rejection" of Biden's and other statements from Washington with regard to the decision.
Multiple OPEC+ producers have also defended the group's decision to reduce production, saying they had all agreed this was the course toward oil market stability and that the decision was unanimous. The UAE's Energy Minister Suhail al-Mazrouei wrote on Twitter, "I would like to clarify that the latest OPEC+ decision, which was unanimously approved was a pure technical decision, with NO political intentions whatsoever."
This week, Saudi Arabia holds the FII forum, dubbed "Davos in the Desert" by the Saudis, with many U.S. finance executives attending, including JPMorgan Chase CEO Jamie Dimon and Goldman Sachs CEO David Solomon.
However, there were no officials from the Biden Administration to be seen at the forum on Tuesday, Reuters reports. But Jared Kushner, a former senior aide to former President Donald Trump, was in attendance and is a featured speaker at the event.
By Michael Kern for Oilprice.com
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Michael Kern is a newswriter and editor at Safehaven.com and Oilprice.com, More
Comments
In the aftermath of the discovery of oil in Saudi Arabia, the Saudis have been endearing themselves to the United States by quenching its thirst for oil, doing its bidding and even financing its military adventures both in Afghanistan against Russia and also in Iraq against the late Saddam Hussain. Saudi Arabia was even instrumental in bringing the petrodollar into existence in 1973 and persuading OPEC to adopt in 1975. However, things have undergone huge changes since then.
Saudi Arabia is aware that the World Order is fast transforming from a unipolar system led by the United States since the collapse of the former Soviet Union into a multipolar one being ushered by the strategic alliance between China and Russia. Saudi foreign policy has to adapt itself to the changing circumstances,
Another aspect is the fast-growing strategic, political and economic relations between Saudi Arabia and both China and Russia. Both act as counterbalance to the United States. A case in point is Saudi refusal to condemn Russia’s military operations in Ukraine.
The Saudis no longer believe in the United States’ promises, assurances or political undertakings since it can renege on all these without a second’s hesitation. A case in point is that the US didn’t come to Saudi defence when the Yemeni rebels, the Houthis attacked the Saudi oil pumping station of Abquiq in September 2019 and destroyed 50% of Saudi oil production.
Saudi Arabia with a GDP of $ 3.0 trillion (the 12th largest in the world) based on purchasing power parity (PPP) and with a young dynamic leader Crown Prince Mohammed bin Salman at the helm is no longer prepared to accept threats, nonsense, condescension and flattery from any American Presidents and will tell them to go to hell if they don’t like it.
Dr Mamdouh G Salameh
International Oil Economist
Global Energy Expert