Why has the oil of the Middle East become a worry for the United States?

Guangming Daily reporter Chen Tianzhe You Ming

A few days ago, Saudi Arabia and other major oil producers decided at the 33rd ministerial meeting of "OPEC+" that oil production will be reduced by 2 million barrels per day on the basis of August data.

The Biden administration, which is worried about high domestic oil prices and inflation, is greatly annoyed, saying that it will re-examine its strategic relationship with Saudi Arabia and threaten to take countermeasures. Since then, U.S. and Saudi officials have made tough remarks accusing each other.

Obviously, with the public statement of the Organization of Arab Petroleum Exporting Countries (OAPEC) in support of OPEC+'s production reduction decision, the contradiction between the United States and Middle East oil producers has been escalating.

The picture shows a customer refueling at a gas station in New York, USA. Xinhua News Agency

Reduce production and increase production, Meisa fighting method

The White House reacted strongly to OPEC+'s decision to cut production, and Biden quickly expressed disappointment with Middle East oil producers, publicly accusing this "short-sighted" behavior as clearly "complicit" with Russia. Many members of the US Senate and House of Representatives have taken a tough stance, threatening to "stop arms sales and reduce the stationing of troops" in order to threaten relevant countries.

In the face of rising public pressure, Biden further stated that he would re-examine US-Saudi relations and warned Saudi Arabia that there are "consequences" for doing so.

In response, Saudi Foreign Minister Al-Jubeir refuted that the high oil prices in the United States are not Saudi Arabia's fault, but the result of the United States suppressing its own oil production. The Saudi Foreign Ministry issued a lengthy statement officially responding to the US accusations. The statement also disclosed the fact that senior US government officials had repeatedly proposed to Saudi Arabia before the announcement of the "OPEC+" production reduction decision, hoping to delay the announcement of the decision for a month.

The analysis pointed out that Biden originally hoped that through the Middle East trip in July this year, Biden would turn the tide on the inflationary pressures and high oil prices that the American people are most dissatisfied with, so that the balance of the midterm elections tilted in favor of the Democratic Party, if not to persuade Saudi Arabia and "OPEC+" to abandon production cuts, at least to postpone production cuts until after the US midterm elections.

Saudi Arabia's statement exposed the "political calculation" of the Democratic Party, which undoubtedly had a serious impact on the Democratic Party's election situation.

Hours after the statement was issued, White House National Security Council spokesman John Kirby responded, pretentiously rebutting article by article. CNN directly used "spasms due to panic" in related reports to describe the "hysteria" of the White House in the face of "OPEC+" production cuts.

U.S. midterm elections: Democrats are passive

At present, the United States is experiencing severe inflation, energy prices remain high, and social contradictions continue to accumulate. Previously, in order to win over environmental groups, the Democratic Party had to limit shale oil production capacity in the United States. Faced with this embarrassing situation of "looking at oil and sighing", the Biden administration can only use the strategic oil reserve.

According to the U.S. Energy Information Administration, according to the current oil reserve release plan, the U.S. strategic petroleum reserve will fall to 388.3 million barrels by the end of the third quarter of this year, the lowest level since March 1984.

The International Energy Information Administration has recommended that a country's strategic oil reserves need to be maintained at least the level of 90-day net imports in the previous year. If all oil imports and production are disrupted, the current Strategic Petroleum Reserve in the United States will only be sufficient for 23.76 days.

In July this year, President Biden visited the Middle East for the first time, and under the pressure of public opinion, he "bowed his head" to visit Saudi Arabia, a country that he falsely called a "pariah", the main purpose was to "seek oil". Under Biden's personal lobbying, "OPEC+" symbolically promised to increase production by 100,000 barrels per day, which is a response to the United States that is better than nothing.

For Biden's "flat end and empty-handed" trip to the Middle East, British National Radio commented that this shows that the limitations of US strength are becoming more and more obvious, and its influence on the Middle East is constantly declining.

OPEC+'s 2 million barrels per day cut is the largest since the outbreak of the new crown pneumonia epidemic. The decision to cut production has pushed international oil prices soaring rapidly, from more than $70 to more than $90. At a critical moment when Democrats are focused on the midterm elections, this is undoubtedly like a resounding slap in the face to the Biden administration.

The U.S. midterm elections will be held on November 8, when all 435 seats in the House of Representatives and 35 of the 100 seats in the Senate will be re-elected. The Biden administration's current approval rating is only 40%, and the election situation is very unfavorable for the Democratic Party. Once the Republican Party succeeds in controlling one or even both chambers, the power of the Biden administration will be constrained.

The rise in global oil and gas prices is considered to be an important cause of inflation in the United States, and for Biden, oil and gas prices will directly affect voters. The reduction in production is likely to become the "last straw" that overwhelmed Biden's support rating. Republicans gloated at this time, mocking Biden and the Democratic Party's empty promise that "oil prices are under control", while accusing the Biden administration of deliberately suppressing US domestic oil and gas production, which led to such a passive situation.

Why is "OPEC+" not afraid to offend the United States

In the face of constant threats from the United States, the Saudi Foreign Ministry said that "Saudi Arabia does not accept orders from the United States." OAPEC also stated that "the production cut is the right decision at the right time". In the face of US pressure, why are Middle East oil producers so tough?

At present, Middle Eastern oil producers and the United States are forming a competitive relationship in the international crude oil market. The Financial Times commented that the OPEC+'s production reduction decision marks a "major break" between Middle East oil producers and the Biden administration.

In the past few months, in response to worsening inflation in the United States, the Federal Reserve has aggressively raised interest rates, pushing up the US dollar index to continue to strengthen, and international oil prices denominated in US dollars have fallen in response. In this sense, OPEC+'s sharp cuts in production despite pressure from the United States are a challenge to the dollar's power to price commodities.

In fact, Middle East oil producers are very worried about the threat to the stable pricing system that OPEC has worked hard to establish for decades, so they are unwilling to cooperate with the United States to contain Russia with oil prices in the Russia-Ukraine conflict.

Saudi Energy Minister Abdulaziz bin Salman has repeatedly said that OPEC+ should play a "regulating force" to maintain the stability of the energy market. UAE Energy Minister Mazroui made it clear that OPEC+ does not want to take sides in the Russia-Ukraine conflict, and the organization only focuses on preventing oil prices from plummeting.

Al Jazeera commented that Middle Eastern oil producers are skeptical of U.S. sanctions against Moscow through tools such as setting a cap on oil export prices, because in the long run, this will shift the pricing power of oil from the seller to the buyer.

At the same time, oil-producing countries have their own security concerns. OPEC member Indonesian Finance Minister Sili Muliani has publicly stated that the collective production cuts are to prevent the United States from "manipulating commodity prices for geopolitical interests", because once this precedent is established, anyone could become the next target of the United States.

"Counterattacking" Saudi Arabia, the United States is in a dilemma

How to "retaliate" against Saudi Arabia? Washington struggled to figure it out, but it was hard to find an effective solution.

Democratic lawmaker Khanna said the previous administration's hasty blank checks to Saudi Arabia gave them a sense of security, and the Biden administration needed to restore the right balance. Menendez, chairman of the US Senate Foreign Affairs Committee, suggested that Congress freeze all levels of cooperation between the United States and Saudi Arabia, including arms sales.

However, the US toughness seems to be only at the level of words. Sanctions proposals by Democratic lawmakers are unlikely to get the cooperation of Republicans, who prefer to reap the benefits of the midterm elections. As Ibishi, a senior fellow at the Arab Gulf States Institute, puts it, "Washington doesn't really have many tools to deal with the production cut decision."

Strategic observers believe that security and military cooperation between Washington and the Gulf states is mutually beneficial, and that any withdrawal of any kind would make the United States "suffer" as much as the other side. Therefore, it will be difficult for the United States to use these policy tools that may undermine itself in the short term.

In fact, stopping arms sales is not only a punishment for Saudi Arabia, but also harms the interests of the US defense industry giants close to the Biden administration, because Saudi Arabia is likely to find alternative sellers to fill the gap in US weapons.

"Oil for safety" may have expired

OPEC+'s decision to cut production is a microcosm of America's diplomatic difficulties in the Middle East. The Al Jazeera report pointed out that the production cut is objectively to protect the oil industry from the risk of a global recession, but it also reflects the profound changes taking place in the geopolitical landscape of the Middle East. The "oil for security" that is the basis of U.S. relations with the Gulf states may no longer be valid.

In recent years, the irresponsible performance of the United States on regional issues such as the Afghan issue, the Iranian nuclear issue, and the Yemen crisis has continuously compromised mutual trust between the United States and its allies in the Middle East. Mahmoud Arush, a Middle East researcher, said: "The Middle East is no longer the Middle East that Americans have known for decades. ”

As the only NATO member in the Middle East, Turkey has also drifted away from the United States in its diplomatic choices. The United States and Turkey are constantly at loggerheads over the Kurdish issue and the development of oil and gas in the eastern Mediterranean. In the face of the Russian-Ukrainian conflict, Turkey openly opposes sanctions against Russia.

The same is true of Egypt, a key U.S. ally in the Middle East. Even under the pressure of the United States and the West, Egypt has not "joined" sanctions against Russia, and in July this year it agreed that Russia would build nuclear power plant generator sets in Egypt, and Egypt's arms purchases from Russia continued to expand.

In the face of profound changes in the international pattern, Middle East countries have generally realized that the Middle East cannot completely pin its future on the United States, but must enhance their ability to manage conflicts without US intervention, and strive for more strategic autonomy through the establishment of new external partnerships and broader regional cooperation.

As Mahmoud Arush said, "The Middle East is no longer a region where the United States is told what to do or not to do." ”

Guangming Daily( October 29, 2022 Version 06)

Source: Guangming Net-Guangming Daily