Did Saudi Arabia Just Hand the Midterms to the GOP? (2023)

early and often

By Jonah Shepp

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Earlier this month, the world’s largest oil-producing countries agreed to significant cuts in production as a means of keeping oil prices high as the global economy faces a potential recession in the coming year. The group known as OPEC+, which includes both the OPEC countries and several other petroleum producers — notably Russia — not formally in the global oil cartel, said it would cut production quotas by 2 million barrels per day starting in November. The decision, led by top oil exporter Saudi Arabia along with other Gulf countries, was also seen as a slap in the face to President Joe Biden, whose administration had been frantically lobbying the Saudis and other Gulf allies to maintain or increase output and allow prices to continue to fall.

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The OPEC move doesn’t mean production totals will fall by 2 million barrels exactly, as many countries were already not meeting their quotas, but it is expected to reduce global daily output by about 2 percent and put upward pressure on already high fuel prices in the U.S., forcing drivers to pay an additional 15 to 30 cents a gallon for gasoline. The decision will also have an impact on Europe, which is already facing high energy costs due to the cutoff of Russian gas exports. The International Energy Agency warned that higher oil prices could be “the tipping point for a global economy already on the brink of recession.”

Biden had hoped for cooperation from Riyadh to help starve Russian president Vladimir Putin’s war machine, which is largely funded by hydrocarbon sales, and further hinder his invasion of Ukraine (Russia’s deputy prime minister, who is under U.S. sanctions, was present at the OPEC+ meeting in Vienna). And of course, Biden wanted gas prices to be going down, not up, in the lead-up to November’s midterm elections.

The insult to Biden came just a few months after the president visited Saudi Arabia and exchanged an infamous fist bump with Crown Prince (and newly appointed prime minister) Mohammed bin Salman. That gesture of friendship with a brutal tyrant was readily interpreted as a nasty bit of realpolitik, with Biden bowing to the fact that he needed Saudi Arabia to keep the oil flowing to keep both inflation and Russia in check. On that visit, Biden secured an understanding from Saudi Arabia and its junior partner, the UAE, to increase production by a total of about 1.25 million barrels per day. The Saudis did ramp up production during the summer, when oil was over $120 a barrel, but backed off as prices began to fall again.

This month’s decision to sharply curtail oil production should not have been terribly surprising, considering that Saudi Arabia and the UAE in particular depend on oil revenues to fund their welfare states and economic-development projects, as well as to enrich their rulers. A global recession could put a deep dent in demand for oil, and if the petro-states continue to produce at their current levels, they might next year find themselves in a downward price spiral that would threaten their economic stability.

In an interview with Vox this week, Samantha Gross, director of the Energy Security and Climate Initiative at the Brookings Institution, pushed back on the widespread notion that this decision was primarily motivated by anything other than economics: “Middle Eastern states have their own interests, and they were genuinely concerned about rapidly falling oil prices and over-producing as the world was going into a recession. They did what they do in those situations: pulling back production. They have their own interests and economies to look after. And they have agency. It’s not just choosing between the United States and Russia.”

That’s certainly not how it’s being interpreted in Washington, however. The Biden administration expressed deep disappointment at Saudi Arabia, which the White House says coerced other OPEC+ countries into agreeing to the cuts over their objections. National Security Council spokesman John Kirby said U.S. officials had shown their Saudi counterparts an analysis showing there was no market basis to lower oil production, and dismissed Riyadh’s claims that the decision was purely economic as “spin.” Biden has threatened “consequences” for Saudi Arabia, but it’s not clear what those consequences might be; the president has few good options here.

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The Saudi government, of course, has rejected the allegations of political gamesmanship and maintains that it is not taking sides in the conflict between Russia and Western countries. Whether because that narrative is true or merely to help sell it, Saudi Arabia’s state news agency announced on Friday that it was providing $400 million in humanitarian aid to Ukraine, and also that Prince Mohammed had made a supportive phone call to Ukrainian president Volodymyr Zelenskyy.

Intentionally or otherwise, the oil cuts could lend support to Russia’s war effort by weakening the impact of international sanctions and propping up the value of its oil exports. Then again, it might not benefit Moscow as much as the Biden administration fears: Gross, from the Brookings Institution, pointed out that forthcoming European sanctions and a U.S. proposal to put a global price cap on Russian oil could still make it harder for Russia to sell its oil at market price, if at all.

Nonetheless, lawmakers in Washington, particularly Democrats, see this latest insult as a sign that Saudi Arabia is an unreliable ally, straying from the U.S. orbit and cozying up to its fellow authoritarian states such as Russia and China. Both the Biden administration and congressional leaders are looking at ways to punish Riyadh for its perfidy. New Jersey senator Bob Menendez, chairman of the Senate Foreign Relations Committee, on Monday called for a freeze on all cooperation with Saudi Arabia, including arms sales, “until the kingdom reassesses its position with respect to the war in Ukraine.”

Several other prominent Democrats have joined Menendez in urging a rethink of U.S.-Saudi relations and pushing for the removal of U.S. soldiers and missile defense systems from Saudi Arabia and the UAE. Connecticut senator Chris Murphy has advocated redirecting a planned delivery of AMRAAM air-to-air missiles from Saudi Arabia to Ukraine and relocating U.S. Patriot anti-missile batteries currently stationed in the kingdom to Ukraine or NATO allies that need to backfill their own defense systems. Democrats are also looking to revive a bipartisan bill called “NOPEC” — No Oil Producing and Exporting Cartels — that would allow the Justice Department to sue Saudi Arabia and other members of the global oil cartel for antitrust violations.

To probably nobody’s surprise, no Republicans are joining in this chorus of recrimination. Instead, the GOP is using the opportunity to hammer Biden and the Democrats for not supporting domestic oil production, which supposedly could have prevented this. The notion that the U.S. is “energy independent” during Republican administrations but at the mercy of Saudi Arabia under Democrats is a canard: The U.S. is a net petroleum exporter under Biden, just as it was under Donald Trump, and the Biden administration has taken heat from environmentalists for its liberal issuance of permits to drill for oil and gas on public land. Opening up even more oil production is one of several bad options the administration has for responding to the OPEC+ decision, and would not have a meaningful near-term impact on oil prices anyway.

Of course, the real reason why Republicans are so quiet about the Saudis’ betrayal is that they stand to benefit from it politically on a massive scale. In itself, a slight uptick in gas prices isn’t necessarily a game changer for the midterm elections, but with so many tight races in key battlegrounds, it’s bad news for the ruling party. A recent piece at the Intercept makes the case that the oil-production cuts are a deliberate act of election interference on the part of Prince Mohammed, who is friendly with Trump and stands to benefit from a Republican takeover of Congress that would set up Trump or some other MAGA stand-in to win the presidential election in 2024. Several analysts who spoke to the Intercept interpret the move as a deliberate October Surprise from the Saudis.

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A savvy operator like Prince Mohammed is surely aware of the political consequences of all his actions, including in the U.S. Whether or not it was his primary motive for cajoling his fellow OPEC leaders into cutting production, he was surely not ignorant of the impact that move might have on the midterms. The Saudi government says the Biden administration asked it to delay the move by a month until after the elections, which is true, is embarrassing for the U.S. Like his buddy Trump, the Saudi crown prince is a practitioner of the politics of domination and humiliation, and in a certain light, the past few months have been an object lesson in that: Biden went to Riyadh hat in hand in July to beg a dictator he once called a “pariah” to keep the oil flowing. He failed to secure a commitment, the Saudis turned their backs on him a few months later, he was reduced to begging again, and they screwed him over anyway.

If the midterms turn out to be a red wave after all, plenty of other factors will have played into that. The OPEC+ cuts may not even make much of a difference: Oil prices have not skyrocketed as of yet, and slowing demand could keep them stable. However, Saudi Arabia had the option of throwing Biden and his party a political lifeline by allowing prices to decline and Americans to pay a little less at the pump this election season — and they chose not to.

If nothing else, the lesson here is that Washington has little to no leverage over policy in Riyadh anymore, even when U.S. and global economic interests are at stake. Saudi Arabia wants to be treated as an equal partner to the U.S., not as the puppet state of a superpower. Part of the love connection between Prince Mohammed and Trump stems from the fact that Trump fulfills that desire, if only because he admires absolute power, doesn’t care about human rights, and is happy to engage in corrupt dealings with foreign autocrats.

Disentangling the U.S. and the global economy from the strings of Saudi Arabia’s oil monopoly is not something that can be done overnight. Indeed, the time to start working toward this goal was decades ago, when the devastating impact of energy crises was clear but we were not in the midst of one. And the solution is not to dig up more fossil fuels of our own, as Republicans and energy-industry executives repeatedly claim, but rather to dramatically decrease our overall dependence on these commodities. Europe is finally waking up to the urgency of that need, and some Americans are as well, but our habit of waiting until a crisis arises and making policy in reaction means the steps we take in the direction of genuine “energy independence” are always too little, too late.

Tags:

  • 2022 midterms
  • early and often
  • foreign interests
  • saudi arabia
  • gas prices
  • politics
  • joe biden
  • democrats
  • the economy
  • russia
  • opec
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Did Saudi Arabia Just Hand the Midterms to the GOP?

FAQs

How much oil is Saudi Arabia producing? ›

Saudi Arabia's National Day
Population (million inhabitants)35.46
Current account balance (million $)44,324
Proven crude oil reserves (million barrels)267,192
Proven natural gas reserves (billion cu. m.)8,507
Crude oil production *(1,000 b/d)9,125
13 more rows

What is the capital of Saudi Arabia? ›

Saudi Arabia's population is 27 million, including 8.4 million foreign residents (2010 census), and its capital city is Riyadh.

Who is the number 1 oil producing country? ›

Saudi Arabia

Saudi Arabia's oil output came in at 10,835,000 bpd in 2021. The country possesses 17 percent of the world's proven petroleum reserves and is the largest petroleum exporter.

Who buys the most oil from Saudi Arabia? ›

At the same year, Crude Petroleum was the 1st most exported product in Saudi Arabia. The main destination of Crude Petroleum exports from Saudi Arabia are: China ($24.7B), Japan ($15.1B), South Korea ($12.8B), India ($11.1B), and United States ($6.59B).

How much land does Saudi Arabia own in the United States? ›

Investors from countries with less friendly relations also hold agricultural land in the U.S. These include China, with 194,179 acres, Venezuela with 28,058 acres, and Saudi Arabia with 18,586 acres.

Is Saudi Arabia rich or poor? ›

Would you rather be rich in a poor country or poor in a rich one?
...
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RankCountryGDP-PPP ($)
27Saudi Arabia55,368
28United Kingdom55,301
29Malta54,647
30South Korea53,051
141 more rows
1 Aug 2022

Why is Saudi Arabia so powerful? ›

Petroleum was discovered on 3 March 1938 and followed up by several other finds in the Eastern Province. Saudi Arabia has since become the world's second-largest oil producer (behind the US) and the world's largest oil exporter, controlling the world's second-largest oil reserves and the fourth-largest gas reserves.

Why does the U.S. not use its own oil? ›

That happens because of a combination of economics and chemistry. The economics are simple: overseas oil, even after shipping costs, is often cheaper than domestically-produced crude.

Why is the U.S. not producing oil? ›

The reason that U.S. oil companies haven't increased production is simple: They decided to use their billions in profits to pay dividends to their CEOs and wealthy shareholders and simply haven't chosen to invest in new oil production.

Does the U.S. produce enough oil for itself? ›

He told Newsweek that the U.S. uses more barrels of oil per day than it produces, necessitating imports from abroad. "The U.S. imports oil because consumption of oil products—about 20 million barrels per day—is greater than the quantity of crude oil it produces, about 18 million barrels per day," Kaufmann said.

Does Russia have more oil than Saudi Arabia? ›

According to the U.S. Energy Information Agency, it's not even close. The EIA reports that as of 2021, the U.S. produced 18.88 million barrels per day — or about 10 million per day more than no. 2 Saudi Arabia (10.84 million) and no. 3 Russia (10.78 million).

How much oil does the United States get from Saudi Arabia? ›

Since 2017, oil imports have decreased by 23%. The impacts of the COVID-19 pandemic likely influenced a decline of 14% in 2020 from 2019.
...
U.S. Crude Oil Imports by Country of Origin.
Saudi Arabia
2017955.126
2018900.647
2019529.745
2020522
7 more columns

Does the US get oil from Saudi Arabia? ›

The top five source countries of U.S. gross petroleum imports in 2021 were Canada, Mexico, Russia, Saudi Arabia, and Colombia. Note: Ranking in the table is based on gross imports by country of origin. Net import volumes in the table may not equal gross imports minus exports because of independent rounding of data.

Does China own any land in the United States? ›

According to U.S. Department of Agriculture (USDA) reports, Chinese investors' holdings of U.S. agricultural land surged from 13,720 acres in 2010 to 352,140 acres in 2020.

Do Saudis own aquifer in Arizona? ›

From Arizona PBS: Arizona is leasing farmland to a Saudi water company, straining aquifers, and threatening future water supply in Phoenix. Fondomonte, a Saudi company, exports the alfalfa to feed its cows in the Middle East. The country has practically exhausted its own underground aquifers there.

Who owns most farmland in USA? ›

The Microsoft co-founder is considered the largest private owner of farmland in the country with some 269,000 acres across dozens of states, according to last year's edition of the Land Report 100, an annual survey of the nation's largest landowners.

Which country is No 1 poor country? ›

Burundi is the world's poorest country followed by Central African Republic, DR Congo, South Sudan and Somalia as the poorest. The richest countries are Luxembourg, Singapore, Ireland, Qatar and Switzerland.

Is Saudi Arabia richer than USA? ›

America's GDP hit a staggering $20.49 trillion in 2019, beating every other economy on the planet. The US is so incredibly wealthy, many states are actually richer than entire countries, including affluent nations such as Switzerland and Saudi Arabia.

Why are Arabs rich in Saudi Arabia? ›

With an estimated value of US$34.40 trillion, Saudi Arabia has the third most valuable natural resource reserves in the world; mostly petroleum and natural gas. The country has the second largest proven petroleum reserves, and sixth largest measured natural gas reserves.

Who are Saudi Arabia's enemies? ›

Iran and its allies like Hezbollah and the Houthis now form the common foe. Saudi Arabia's Gulf allies Bahrain and the United Arab Emirates recognized Israel in 2020, largely to get the Saudis' support against Iran.

Does the U.S. protect Saudi Arabia? ›

The core logic underpinning the relationship is that the United States of America (USA) provides military protection of the Kingdom of Saudi Arabia (KSA) in exchange for a reliable oil supply from the Saudis, pricing of oil in USA dollars, and Saudi support for USA foreign policy operations across the world.

Does the U.S. have military bases in Saudi Arabia? ›

Eskan Village has been home to U.S. forces in Saudi Arabia for over 30 years and it holds a unique status within the Kingdom of Saudi Arabia.

How many years of oil does Saudi Arabia have left? ›

Saudi Arabia has proven reserves equivalent to 221.2 times its annual consumption. This means that, without Net Exports, there would be about 221 years of oil left (at current consumption levels and excluding unproven reserves).

Who produces the most oil 2022? ›

The United States of America is the top country by production of crude oil in the world. As of August 2022, production of crude oil in the United States of America was 12,090.29 thousand barrels per day. The top 5 countries also includes Saudi Arabia, Russian Federation, Iraq, and China.

How much oil does Saudi Arabia have 2022? ›

Saudi Arabia - Crude Oil including Lease Condensate Reserves

In June 2022, crude oil reserves for Saudi Arabia was 10,560.7 thousand barrels per day.

What percent of US oil comes from Saudi Arabia? ›

11% comes from Mexico. 11% from OPEC nations. 7% comes from Saudi Arabia.

How much oil does the United States have left? ›

National summary
Crude oil billion barrelsTotal natural gas trillion cubic feet
U.S. proved reserves as of December 31, 201944.2495.4
Extensions and discoveries339.8
Net revisions-8.8-98.2
Net adjustments, sales, acquisitions1.273.4
5 more rows
13 Jan 2022

How long will US oil last? ›

Oil Reserves in the United States

The United States has proven reserves equivalent to 4.9 times its annual consumption. This means that, without imports, there would be about 5 years of oil left (at current consumption levels and excluding unproven reserves).

How much oil does the US have in reserve? ›

Current days of import protection in SPR - At the end of CY 2021 (as of December 31, 2021), the SPR's crude oil inventory was 594.7 MMbbl. This is equivalent to approximately 1,206 days of supply of total U.S. petroleum net imports.

Does the U.S. have more oil than Saudi Arabia? ›

According to the U.S. Energy Information Agency, it's not even close. The EIA reports that as of 2021, the U.S. produced 18.88 million barrels per day — or about 10 million per day more than no. 2 Saudi Arabia (10.84 million) and no. 3 Russia (10.78 million).

Does Texas produce more oil than Saudi Arabia? ›

If Texas were a country — and many of us feel like it already is — it would rank fourth in the world for crude oil production, behind the United States, Russia and Saudi Arabia.

Which 2 countries use the most oil? ›

Oil Consumption by Country
#CountryYearly Gallons Per Capita
1United States934.3
2China138.7
3India51.4
4Japan481.5
94 more rows

Why isn't the US drilling more oil? ›

According to Bloomberg, “U.S. oil companies generally have been reluctant to pump more, preferring to steer cash flows back to investors instead of spending it on new drilling that could flood the world with cheap crude.”

Where does the US get most of its oil? ›

The top five source countries of U.S. gross petroleum imports in 2021 were Canada, Mexico, Russia, Saudi Arabia, and Colombia. Note: Ranking in the table is based on gross imports by country of origin. Net import volumes in the table may not equal gross imports minus exports because of independent rounding of data.

What country has the most oil in the ground? ›

Venezuela

Can the U.S. produce its own oil? ›

Crude oil is produced in 32 U.S. states and in U.S. coastal waters. In 2021, about 71% of total U.S. crude oil production came from five states. In 2021, about 15.2% of U.S. crude oil was produced from wells located offshore in the federally administered waters of the Gulf of Mexico.

Can the U.S. refine its own oil? ›

The United States has adequate refinery capacity to process its current and projected crude production, however the free world oversupply of refining capacity will persist through the few remaining years of increasing world crude oil production and thereafter.

Has oil production in the U.S. decreased? ›

High gas prices have everyone from truckers to politicians demanding more domestic oil production. While drilling is up, oil production in this country is still down from three years ago.

Videos

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