Top US senator calls for action over oil production cuts

Washington angered by high cost of oil after Opec+ decision to greatly decrease output

Senator Bob Menendez at a hearing this year. He could block US weapons sales to Saudi Arabia. Reuters
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A top US senator urged President Joe Biden's administration on Monday to "immediately freeze all aspects” of Washington's co-operation with Saudi Arabia and threatened to block all future weapons sales in response to Riyadh's decision to cut oil production amid the Russia-Ukraine War.

Democrat Bob Menendez, who chairs the influential Senate foreign relations committee, accused Riyadh of helping to "underwrite Putin's war" through Opec+.

"I will not green-light any co-operation with Riyadh until the kingdom reassesses its position with respect to the war in Ukraine," Mr Menendez said.

As chairman of the panel, he has the power of veto over US foreign weapons sales.

Jonathan Lord, director of the Middle East programme at the Centre for a New American Security, told The National that the House foreign affairs committee already had a policy blocking sales to Riyadh that were not specifically for national defensive measures, such as Patriot Missile batteries used to stop Houthi attacks.

"What's significant about this announcement is that presumably … it would foreclose the ability of us to sell the Saudis defensive military equipment like Patriot battery-related missile replenishment," Mr Lord said.

"And that's particularly significant at this moment, because it was just announced in August, a foreign military sale worth just over $3 billion for the US to replenish the Saudis Patriot missile battery supply."

"Those batteries become depleted if you fire the missiles. And so [the Saudis] would ultimately be at risk of not being able to use their Patriots over time if those stocks fall below a certain threshold."

Opec+ announced it would slash its November output by 2 million barrels per day, its biggest production cut since the start of the pandemic in 2020, which led to a jump in oil prices.

The decision was made in “light of the uncertainty that surrounds the global economic and oil market outlooks, and the need to enhance the long-term guidance for the oil market, and in line with the successful approach of being proactive and pre-emptive”, Opec+ said.

The move came months after Mr Biden visited Saudi Arabia to try to reset ties with Riyadh and request extra oil to help offset record-high prices in the US.

Mr Lord said the Washington-Riyadh relationship had become increasingly transactional, and that Washington has a degree of "cognitive dissonance" over its capacity to shape policy in Riyadh.

"There's this idea that somehow the Saudis will synthesise a low price of oil, and in exchange we provide them security," he said.

"But in honesty, what the US actually does provide them is, by and large, purchased by the Saudis."

Washington and its allies in Europe have portrayed the production cut as a pro-Russian decision.

Energy has been an increasingly important source of revenue for Moscow amid increased international sanctions, and its invasion of Ukraine has strained western energy markets that had relied on Moscow.

Mr Lord said the Opec+ decision might not have considered the war in Ukraine as a factor.

"They have their own interests in determining the price of oil," he said.

"[Production cuts] have a lot less to do with the Russia-Ukraine conflict … than it does with the fact that the Saudis, along with all the other states that rely on oil production and sales as the primary means of state revenue, are looking around the global economy, and it's a time of great uncertainty and inflation."

The Saudi Arabian embassy in Washington did not immediately respond to a request for comment.

Updated: October 11, 2022, 2:06 AM