Is the rift between the US and Saudi Arabia difficult to resolve? The US makes it clear that Saudi Arabia does not buy it and insists that OPEC + production cuts are suppliers of political behavior

Financial Associated Press, October 24 (editor Bian Chun)After OPEC angered the United States, Saudi Arabia repeatedly made it clear that it was purely for economic reasons. But the US side remained unmoved, insisting that the production cut was political.

Amos Hochstein, a senior energy advisor to US President Joe Biden, said recently that Saudi Arabia and its allies have cut oil production as a largely political move and that the US government will work to curb the internal energy prices.

The reduction is not that great

Hochstein was involved in this year’s US-Saudi oil diplomacy. He pointed out that OPEC + had previously decided to cut production by 2 million barrels per day starting in November, but the actual reduction is expected to be only about a quarter of that figure.

“So the impact of the production cuts on the market won’t be that significant,” Hochstein said in a show on Sunday. “so,This is more like an important OPEC political statement。 “

“Obviously,Nobody would think it was for any economic reason. ‘He added.

OPEC + is an alliance of 23 oil producing countries led by Saudi Arabia and Russia. At a meeting in Vienna earlier this month, OPEC + decided to cut production by 2 million barrels per day, a sizable cut and a clear policy reversal after months of steady increases.

It is worth noting that, according to media reports citing people familiar with the matter, just days before OPEC + announced a major decision to cut oil production, US officials urgently called relevant officials in Arabia. Saudi and other major oil producing countries in the Gulf calling for a postponement of the decision to cut production for another month. The result was severely rejected.

After Saudi Arabia pushed OPEC + production cuts against the will of the United States, the United States went on a rampage, threatening to punish Saudi Arabia and re-evaluate its relations with Saudi Arabia. . The US believes that, as a longtime ally, Saudi Arabia’s move amounts to “staying in line” with Russia.

The Saudi side retorted that the production cuts were purely for “economic considerations” and to stabilize the market and did not contain political factors. OPEC + members also expressed their support for the production cuts, saying the move is of historic significance to maintain the balance and stability of the oil market.

The United States did not accept the above clarification, insisting that Saudi Arabia planned OPEC + production cuts for political reasons, which were to help Russia increase foreign exchange earnings to support the conflict between Russia. and Ukraine.

The United States is ready to release further reserves

Another reason for the US government’s anger is that as the midterm elections approach, lowering oil prices has become a priority issue for the government and OPEC wants to “fight” the US in this. moment.

Biden announced last week that he would release another 15 million barrels of crude oil from the US Strategic Petroleum Reserve and said he asked his team to be ready to release additional reserves if necessary to control gasoline prices.

“We are making sure we are ready, and if we need to release more oil, we can do it very quickly,” Hochstein said.