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US Secretary of State Antony Blinken said Thursday that Saudi Arabia knew that the OPEC+ decision to cut oil production “would increase Russian revenues” and that the United States is reviewing “consequences” for that decision.
The top US diplomat also confirmed that American officials had urged the oil cartel to hold off its choice, saying the US suggested OPEC+ wait and see how markets reacted in the coming weeks.
The organization’s decision to slash production by two million barrels a day has sparked outrage from the Biden administration and US lawmakers and has prompted calls for a drastic shift in the relationship between the US and Saudi Arabia.
Speaking at a press conference at the State Department, Blinken said that prior to the announcement of the decision, “the Saudis had conveyed to us both privately as well as publicly their intention to reduce oil production, which they knew would increase Russian revenues and potentially blunt the effectiveness of sanctions.”
“We made clear that that would be the wrong direction on that basis alone, the impact that it would have potentially on sanctions, but also because we’re in a global economic recovery,” he said. “The recovery is fragile. We’re dealing with headwinds from Covid. We’re also dealing with headwinds from the Russian aggression itself. And so now is not the time to take energy off the market.”
Blinken reiterated that the Biden administration believes energy supply needs to meet market demand, and said OPEC+ “presented no market basis for the cuts.”
“We suggested that if they did have concerns about prices going down significantly, if their objective was to keep prices at a certain level, they should they should wait and see how markets reacted over the coming weeks and wait at least until their next monthly meeting,” he said. “So that’s what we strongly urged them to do … they didn’t do it.”
“As the President’s made very clear, that decision has to have consequences and that’s something that we’re reviewing as we speak,” Blinken said, but noted that the US has “a multiplicity of interests in Saudi Arabia.”
The Saudi Foreign Ministry said in a statement Wednesday that the decision was not politically motivated and was “based purely on economic considerations.”
The statement said Saudi officials had conveyed to the US “that all economic analyses indicate that postponing the OPEC+ decision for a month, according to what has been suggested, would have had negative economic consequences.”
“The Government of the Kingdom of Saudi Arabia affirms that any attempts to distort the facts about the Kingdom’s position regarding the crisis in Ukraine are unfortunate, and will not change the Kingdom’s principled position, including its vote to support UN resolutions regarding the Russian-Ukrainian crisis, based on the Kingdom’s position on the importance for all countries to adhere to the United Nations Charter, principles of international law, and the Kingdom’s rejection of any infringement on the sovereignty of countries over their territories,” the statement said.
On Thursday morning, US National Security Council coordinator for strategic communications John Kirby accused the Saudi Foreign Ministry of trying to “spin or deflect.”
“Other OPEC nations communicated to us privately that they also disagreed with the Saudi decision, but felt coerced to support Saudi’s direction,” Kirby said.