The decision by the Organization of the Petroleum Exporting Countries to reduce oil production was a blow to President Biden, who was trying to avoid an increase in gas prices during the election season.
He failed in his diplomacy with the crown prince of Saudi Arabia.
Russia's deputy prime minister is under American sanctions. It came after a concerted but ultimately unsuccessful diplomatic effort by Washington to stop the oil production cut.
In an era in which oil should be diminishing in importance as a source of energy, it showed that the organization acts in its own self-interest. Maintaining the price per barrel has proved to be more important to its members than making Russia pay a price for invading Ukranian.
The war in Ukraine, as well as domestic politics in the United States, were some of the foreign and economic issues that came together at the meeting of the OPEC Plus energy group.
The White House tried to stop the cut. When Mr. Biden visited Saudi Arabia in July, he met with the crown prince despite opposition from some of his own advisers.
He took the risk to address a variety of national security concerns, but mostly to increase the supply of oil, even if it meant withstanding the critique that he was partake in the rehabilitation of Prince Mohammed, who the C.I.A. concluded approved. Saudi Arabia was called a "pariah" by Mr. Biden during his campaign for president.
The quiet understanding emerging from the trip was that Saudi Arabia would increase its production by about 750,000 barrels a day, and that the United Arab Emirates would follow suit, pushing down gas prices.
The increases were brief. Saudi Arabia boosted production in July and August but didn't keep their promise to sustain those levels over the rest of the year. The leaders of the organization worried that the global economy was going to cause prices to go down. Social stability is at risk if budgets are cut below that level. The Saudis decided they had to take action.
The production cut will reduce global daily production by 2%, but some of that is a phantom reduction because the group's members were already under producing from their own goals. Experts estimated that its effect on prices could be as high as 30 cents a gallon at the pumps.
The timing could not be worse for Mr. Biden.
The decision shatters any notion that the Arab allies signed up for the cause of making Russia pay a price.
It shouldn't have been a surprise. Iran is a member of the group and has become closer to Russia in the last few months.
Alexander Novak, Russia's deputy prime minister, is under US sanctions for his role in Russia's aggression in Ukraine.
Mr. Novak is trying to find a way out of the effort by the United States and Europe to cap the price of Russian oil. He was nowhere to be found at the news conference.
The price of Russian oil is at risk of being capped. Russia has been forced to give China and other countries steep discounts in exchange for their willingness to ignore the effort to ostracize the country. The production cut will raise revenue for all the members of the group.
In a statement from Jake Sullivan, the national security adviser, and Brian Deese, who heads the National Economic Council, the White House said Mr. Biden was disappointed by the shortsighted decision by OPEC Plus to cut production quota. Congress will be consulted on additional tools and authorities to reduce the control of the oil company.
The Saudis were willing to speak up.
The Saudi oil minister said that they would rather be pre-emptive than sorry. He didn't say anything about the agreements with Washington.
The degree of anger and surprise at the White House was obvious: On Tuesday the press secretary, Karine Jean-Pierre, told reporters "we're not considering new releases" from the nation's strategic petroleum reserve beyond what Mr. Biden had announced previously. The White House said the Energy Department would release 10 million barrels next month.
Ms. Jean-Pierre said that it was clear that the organization was aligning with Russia.
The officials didn't say that Mr. Biden regretted the fistbump with Prince Mohammed. During the trip, Mr. Biden was very uncomfortable and never mentioned the dissident and former Washington Post columnist by name when he appeared with Prince Mohammed. Mr. Biden told the reporter that he confronted the prince privately and made his opinion clear.
At the time, officials said that they had made major progress in ending the war in Yemen, which the Saudis had helped prosecute, and that they were closer to Saudi recognition of Israel. The Saudi decision to support the oil output cut by OPEC and its allies marked another step in the strategic distance between the two historic partners.
If there is a lesson to be learned from Mr. Biden, it is that the days of American presidents asking for favors from their Saudi allies for the sake of the relationship are over.
Prince Mohammed has distanced himself from Washington in order to cultivate relationships with other countries. He made it clear that he doesn't see Saudi Arabia as a junior partner to the United States and that he is willing to ignore any demands that he considers contrary to Saudi interests.
The interaction between the crown prince and Mr. Biden has played out this way since the start of the Biden administration. In the last few months, it was clear that the time had come to reset the relationship. That is what the fistbump meant. The Saudi agreement to increase oil output was a part of the deal.
The Saudis did not consider the benefits of helping the United States after Mr. Biden's visit enough to continue the favor.
The move was seen as a direct hit on Mr. Biden.
It's political. Cinzia Bianco is a Gulf research fellow at the European Council on Foreign Relations.
She said that the Saudis were disappointed by what they had received from the US.
She said that whenever it made sense to backtrack, they did.
Saudi analysts don't believe that the cuts were made for technical reasons.
Ali Shihabi, a Saudi analyst, said that it was not anti-Biden. It doesn't have anything to do with Biden. The price should be in a band.
Ensuring that the commodity remained lucrative was more important to Prince Mohammed than other concerns, according to Mr. Shihabi.
He said that they were just trying to keep their economic lifeline. Everything is dependent on this in the kingdom.
The new cuts were seen by other oil market watchers as a reflection of how global oil markets had been roiled in recent years, including by the Russian invasion of Ukraine.
Saudi Arabia didn't criticize Russia's invasion. Europe is trying to cut off Russian oil and gas in order to suck money from Mr. Putin.
Saudi Arabia wants to show that they can drive the market in the midst of turmoil.
Karen Young is a senior research scholar at the Center on Global Energy Policy. The ability to make this market is established by them.
Ben Hubbard was reporting from Istanbul.
All Rights Reserved © 2024
