via Financial Times
Joe Biden warned that Saudi Arabia would face “consequences” for defying Washington by announcing large cuts to oil production last week as he vowed to re-evaluate the US relationship with Riyadh in talks with Congress next month.
“I’m not going to get into what I’d consider and what I have in mind. But there will be consequences,” the US president told CNN in an interview on Tuesday night. “When the House and Senate get back [after the midterm elections] . . . there’s going to be some consequences.”
Last week Opec+, which is led by Saudi Arabia, the world’s top oil exporter, and Russia, announced that it would cut its oil production targets by 2mn barrels a day, despite pressure from Washington not to go ahead with the move.
Saudi Arabia said the cartel took the decision because of market conditions amid fears of a global recession, and to preserve prices as the kingdom pushes ahead with highly ambitious plans to modernise the conservative nation. But the move infuriated the Biden administration as it prepares for midterm elections next month and as the world grapples with soaring energy inflation triggered by Russia’s invasion of Ukraine.
The action/reaction aspect of this thing is fascinating.
First you had the Biden admin come into office calling the Saudis a pariah nation.
Then you had Biden trying to make nice with them.
Then the Saudis give Biden the middle finger.
Now you have Biden saying there will be consequences.
Wonder what the Saudi reaction will be. Will they go full rogue? Will they further develop the basket of currencies that they sell their oil for? Will they impose pain and start another oil embargo?
Interesting times!
