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US Should Beware The Consequences Of Taking On OPEC – OpEd

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By Osama Al-Sharif*

America’s reaction to last week’s decision by OPEC+ to slash production as of November by 2 million barrels per day has been hysterical, impulsive and politically motivated. President Joe Biden blamed Saudi Arabia and Russia for tightening production when the US wanted the opposite in the hope of lower energy prices. The White House threatened to take action, while US lawmakers from both sides of the aisle called for retribution against the “cartel” by passing “NOPEC,” the proposed No Oil Producing and Exporting Cartels Act.

Others called for taking direct action against Saudi Arabia, such as denying it access to military hardware and ending military cooperation. But it is important to note that, while Washington was looking at the possible impact of the oil cut on American consumers, the midterm elections and the war in Ukraine, OPEC+ was doing what it usually does, which is to regulate the flow of crude oil to world markets in a bid to control prices. That is what OPEC+ is all about.

The fact that Russia is part of the group has no bearing on what Washington policymakers want or hope to achieve. The organization is not party to any war, conflict or dispute. It simply seeks to protect the economic interests of oil-producing countries, as it had done for decades before the conflict in Ukraine.

Calls to make OPEC+ legally accountable under NOPEC are reckless. Such an act, if it passes and is signed into law by Biden, would end up hurting the global economy and the US in particular. Saudi Arabia is not an enemy of America but a close friend. OPEC+ is not a political weapon but an organization that seeks to protect the interests of its members.

Regardless of how members of the organization feel about the war in Ukraine, Saudi Arabia is on record as upholding international law in this case. Adel Al-Jubeir, the Kingdom’s minister of state for foreign affairs, told Fox News this week that his country does not politicize oil or decisions on oil productions. “Oil is not a weapon … we look at oil as a commodity and we look at all this is important to the global economy in which we have a huge stake,” he said.

Saudi Arabia and other long-term US allies in the Gulf are committed to the peaceful resolution of conflicts. At the same time, they are not ready to be dragged into an anti-Russia alliance over conflicts they have nothing to do with. This position has been clear from the beginning and it is shared by other non-Arab countries, such as India, Brazil and China. The US-Russia wrangle is complicated and ideologically based. Both parties lack trust in each other and, while Saudi Arabia and other OPEC+ members support the territorial integrity of Ukraine, they have no qualms about dealing with Russia over mutual interests. This is the way the world is run today. Common interests are important and America’s allies see no reason to take sides in a conflict that is turning into an East versus West confrontation.

While US lawmakers blame OPEC+, they should listen to French President Emmanuel Macron, who last week rebuked both Norway and the US for selling much-needed liquefied natural gas at “four times” the price they charge their own industries. “In a spirit of great friendship, we will say to our American and Norwegian friends: ‘You’re super, you supply us with energy and gas, but one thing that can’t go on for too long is us paying four times more than the price you sell to your industry,’” Macron said. “That is not exactly the meaning of friendship.”

Macron’s statement underlines US hypocrisy when it comes to controlling energy prices. America is one of the world’s biggest oil producers, with an average production capacity of 11.8 million barrels per day, which it is expected to raise to 12.6 million bpd in 2023. Meanwhile, its crude oil imports of about 6.1 million bpd in 2021 accounted for about 72 percent of its total gross petroleum imports, while it exported about 8.5 million bpd of petroleum to 176 countries and four US territories. In short, the US can also influence energy markets and help its European allies by supplying both oil and liquefied natural gas at acceptable prices. Why should OPEC+ be the one that conforms to America’s foreign policy priorities?

Finally, most oil transactions today are made using so-called petrodollars. This is what keeps the US currency buoyant and, if America wants to wage war against OPEC, it will have to be ready to handle the consequences.

  • Osama Al-Sharif is a journalist and political commentator based in Amman. Twitter: @plato010

Arab News

Arab News is Saudi Arabia's first English-language newspaper. It was founded in 1975 by Hisham and Mohammed Ali Hafiz. Today, it is one of 29 publications produced by Saudi Research & Publishing Company (SRPC), a subsidiary of Saudi Research & Marketing Group (SRMG).

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