Will the threat of Iran stall Biden’s promised consequences for Saudi Arabia?
The aftermath of OPEC’s decision to cut oil production is bringing the cracks in the U.S. and Saudi Arabia’s decades-long relations into sharp focus. In early October, OPEC+, an intergovernmental oil supply organisation, announced its intention to cut approximately two million barrels a day, sparking significant outrage among U.S. officials and drawing a promise from President Biden of ‘consequences’.
Although a prominent fixture in the oil marketplace, Saudi Arabia is widely considered OPEC’s defacto leader and has been under international scrutiny over the decision for two predominant reasons. From an economic standpoint, the announcement has been deemed by experts such as the International Energy Agency as the ‘tipping point’ that could drive an already struggling global economy into recession. The outcome is additionally of huge benefit to Russia, which was producing under its quota and can now produce more oil at higher price points under the new terms. This comes despite heavy European attempts to curb Russian energy revenue by decreasing overall import dependence as well as the G7’s recent decision to impose a cap on Russian oil exports. From a U.S. perspective, the decision is a significant breach with the Biden administration and its unofficial alliance with Saudi Arabia to help drive down oil and petrol prices ahead of crucial November midterm elections, sparking significant outrage among U.S. officials.
The proposed consequences by members of the Biden Administration range from banning weapons sales to Saudi Arabia and unleashing the Justice Department to filing a lawsuit against OPEC members for collusion. Similarly, Saudi has alluded to retaliatory measures of dumping U.S. debt and could further divert from Western interests by redirecting oil sales. The effect of this could be profound, causing huge ripple effects in financial markets in an already weakened economy while highlighting risks to bilateral relations between the U.S. and Saudi. Saudi Arabia has defended its decision as purely economic and unanimous while strongly rejecting that the Kingdom was politically motivated against the U.S. due to its stance on Russia’s invasion of Ukraine. However, the strong U.S. backlash to the cuts suggests that Biden is serious about re-evaluating the relationship with the Kingdom in order to best serve U.S. interests, which may change the dynamic of bilateral relations between the two countries.
Despite the frosty back and forth, it is unlikely that this setback will spark a fundamental change in U.S. relations with Saudi Arabia due to both countries' strong regional interests, particularly in the common threat of Iran. Recent intelligence reports released on November 1st warned of an imminent Iranian ballistic missile and drone attack on Saudi Arabia, which prompted the swift launch of U.S. warplanes stationed in the Gulf towards Iran. Since September, Iran has attacked northern Iraq with ballistic missiles and publicly accused Saudi Arabia and the U.S. of fueling the daily demonstrations against Iran’s Islamic Republic. The immediate alert status of U.S. and Saudi forces is a clear illustration of the strong partnership between both countries despite calls for a revaluation and heavily conveys that both will remain united on matters of securitisation against Iran. In addition, the U.S. is unlikely to abandon weapons sales to Saudi given the high risks of Washington’s counter-terrorism efforts and the threat of Israel’s integration in the region.
However, the threat of consequential action by Biden should not be taken lightly, particularly due to the timing of the oil cuts against the magnitude of the midterm elections, which will determine which party controls Congress. This matter will significantly shape the rest of Biden’s presidential term and may lead to a consequential shift in future Democrats' attitude towards relations with Saudi Arabia. In the short term, it is likely that the Biden administration will stall its promise of action for more urgent priorities against Iran and will continue close ties with Saudi to minimise the risk of regional conflict. However, Saudi Arabia’s economic ties to Russia remain a long-term problem for Western allies, as will any future rebuff of U.S. interests, which may place the Kingdom at risk for future international pressure to take action against Russia and address its controversial position of neutrality in relation to the ongoing Ukraine war. In the context of the OPEC decision and the U.S.’s determination to secure their interests, it brings forth future questions of whether this is the start of Saudi Arabia’s significant shift towards ‘putting Saudi first’ and securing their interests against Western opposition.