The emerging “coal war” between the United States and Saudi Arabia

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What was once a strategic alliance is quickly becoming a sour powder keg for a trade – or even worse, physical – war between the United States and the Kingdom of Saudi Arabia.

The situation was made worse by the latest Saudi-led OPEC+ decision to cut oil production by 2 million barrels a day in November, which is about 2% of total global demand, marking the most sharp drop in production since the start of Covid-19. in 2020.

Apparently, US President Joe Biden has been revealed by the Kingdom that he has requested, through ongoing consultation, to delay the planned cut in oil production for a month. However, OPEC+ apparently rejected the request, citing the delay “would have had negative economic consequences”.

The reduction in production is seen, primarily by the United States, as “taking a stand in international conflicts” and “politically motivated against the United States of America”. Saudi Arabia flatly denied this, saying the “unanimous” decision by OPEC+ is based “purely on economic considerations”.

OPEC+’s decision to cut supply is expected to push up global oil prices, which would boost oil revenues for the biggest oil exporters like Russia.

Now backed into a corner, the US administration is frantically looking for ways to cushion the blow to the anticipated rise in oil prices while trying to take a job in the group of oil-exporting countries.

The US Senate has revived a proposal known as ‘NOPEC’, defined as ‘no oil production and export cartels’ – an obtuse reference to the Saudi Arabia-led Organization of Oil Producing States . The measure was recently launched by Senate Majority Leader Chuck Schumer, apparently in response to the organization’s decision to cut its monthly output.

“We are reviewing all legislative tools to best deal with this appalling and deeply cynical action, including the NOPEC bill,” Schumer said in a statement.

If passed, the NOPEC measure would allow the Justice Department to sue OPEC+ countries and their state-owned oil companies under antitrust laws in the United States.

Biden also confirmed on Tuesday that 15 million barrels of oil will be released from the Strategic Petroleum Reserve (SPR) and that the government will only begin to replenish the reserve when oil prices decline significantly from current levels. The White House also urged the Department of Energy to be poised for further major SPR sales this winter if Russian or other activity disrupts global markets.

LILY: Joe Biden prepares to frantically sell reserve oil after being snubbed by OPEC

Democratic Rep. Tom Malinowski, who backed Biden’s controversial trip to Saudi Arabia in July as a way to “ensure that our client states who rely on our security are on our side,” led the introduction of a House legislation requiring the withdrawal of US troops and missile systems stationed in OPEC member countries Saudi Arabia and the United Arab Emirates.

Administration officials are also reportedly discussing tactics to discourage US companies from investing in Saudi Arabia. For starters, the government won’t send an official to the Future Investment Initiative in Riyadh, also known as “Davos in the Desert,” an annual gathering of senior leaders and investors who rub shoulders with Saudi dignitaries.

As for hints of taking sides in global conflicts, the Kingdom reiterated that it would not change its “principled position” regarding the Russian-Ukrainian war, “including its vote in favor of UN resolutions” related to crisis.

OPEC, for its part, has reminded Washington that the group is a “technical organization” rather than a political one, and will not respond to Biden’s demands even if it means damaging relations with the United States.

But while he maintains that he does not take sides in global conflicts, it seems that he has just taken sides when it comes to trade relations. During a visit to Riyadh, South African President Cyril Ramaphosa revealed that Saudi Crown Prince Mohammed bin Salman (MBS) had expressed interest in joining the BRICS countries, a growing economic alliance of major economies that includes the Russia.

According to former US diplomat Aaron David Miller, the situation has turned into “the unraveling of this essential compromise”. The US no longer needs Saudi oil imports (although it remains vulnerable to Saudi influence on global energy prices), while MBS and his cohort have made it clear that the kingdom will diversify its long-term geopolitical portfolio, cultivating closer ties with other countries. from China to Brazil.

Saudi officials have expressed amusement at the US reaction in public.

“When you’re in election time, what some call ‘the funny season’, a lot of things are said and a lot of things are done that maybe don’t make sense at another time,” Adel said al -Jubeir, Minister of Foreign Affairs. state of foreign affairs, told CNN. “I hope that’s what we’re dealing with here.”

Twitter user @quanyi_li2 provides a bleaker prognosis on the US-Saudi situation, saying the kingdom’s decision to join the BRICS and move away from Washington, DC will be a prelude to abandoning the US dollar. This could potentially be “the most dangerous time of [Saudi’s] the story.”

“It’s out of fear of that [moving from USD]the United States will do everything in its power to prevent it, including war, for example the invasion of Iraq, Libya, etc. USD transition must be accompanied by a (military) security agreement with China or Russia,” the user tweeted. .

The user concluded that “the United States will be forced to either abandon Israel or engage in a three-pronged war with Russia in Europe, Saudi Arabia and Iran in the Middle East, China and [North Korea] in East Asia.

Either that or MBS is just waiting for a resurgence of Republicans in US government – as he once did with former President Donald Trump.

“The bottom line is that MBS doesn’t care,” Miller said, “and he really believes he has tremendous leverage over the United States and he’s dealing with a president who is at his eyes an awkward speed bump.”


Information for this briefing was found via the Daily Mail, the Washington Post and the sources mentioned. The author has no security or affiliation related to this organization. Not a buy or sell recommendation. Always do additional research and consult a professional before purchasing a title. The author holds no license.

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