What's Really Behind the OPEC+ Price Hike?
The cartel's decision was not primarily aimed at helping Russia
It’s been about eight months since I sent out one of these newsletters. I am hoping to get back to doing them more regularly again soon, but this was a piece I needed to share with all of you. Please do spread it around if you find it useful.
A great deal of politics, domestic and international, is theater, meant to elicit responses from the public more than to advance specific goals. By no means does that describe all politics and diplomacy; often that theater is mixed in with the actual policy or tactical decisions being made. But the point of the theater is to allow decision-makers to divorce political consequences from their policy decisions.
It is that performative quality that is driving the current news cycle about Saudi Arabia and OPEC+. The framing of the issue—that the Saudis have decided to side with Russia in its fight with the West—is backward and misleading. It is a sad mark of where we are in the United States that the discourse among liberals and, indeed, even much of the harder left is accepting this framing unquestioningly, despite its obvious incompatibility with the facts.
The Biden administration is presenting the recent decision by the OPEC+ cartel as a Saudi decision to support Russia in its invasion of Ukraine. That mischaracterizes the action. Of course, OPEC+’s decision to cut production of oil by 2 million barrels per day (bpd) is going to be a boon to Russia at a time when it is suffering serious setbacks in its war on Ukraine.
But that’s not why the Saudis are doing this. While they are surely aware that this will help Russia, which, while not a member of the OPEC cartel, is a major oil exporter and an ally to the cartel, thus part of OPEC+, there is no rationale for the Saudis to back Russia’s invasion of Ukraine. Indeed, if this were the motivation, it would put the Saudis more firmly in the Russian corner than almost any other country, except for Belarus. How does such aggressive alienation of the US and Europe serve Saudi interests?
Put simply, in that framework, it doesn’t. The Biden administration and the mainstream media have offered no rationale for how siding with Russia serves those interests either. Indeed, the meeting this week between United Arab Emirates President Sheikh Mohammed bin Zayed Al Nahyan (MBZ) and Russian President Vladimir Putin only serves to further undermine this flimsy narrative. The UAE has devoted enormous effort and resources in recent years to improving its position in the US and Europe, with a great deal of success. Yet the UAE fully and enthusiastically supported the production cut. MBZ then went to Moscow to strengthen the relationship with Russia, in keeping with the UAE’s policy from the start of Russia’s invasion of Ukraine of maintaining neutrality and working to continue to improve their connections to both Russia and the West, not to abandon one for the sake of the other.
If we discount the ridiculous idea that the Saudis moved to raise oil prices to help Russia, we return to their actual agenda, one which they have been pursuing from the minute Joe Biden won the 2020 election: to make Biden’s stay in the White House and the Democrats’ control of Congress as brief as possible.
This plan was evident back in the Spring. At the June meeting, OPEC+ announced it would sharply increase production in July and August. The corollary was immediately clear: production cuts, likely substantial ones, loomed after the summer.
Prior to June, gas prices had soared and were nearing $5 per gallon in the US, not only reinforcing inflationary effects that predated the rise in oil prices but sending Joe Biden’s and Democrats’ electoral prospects sinking on the all-important economic front. The relief the June announcement saw gas prices tumble back under $4 per gallon, but not to the levels they had been in 2021. But Biden knew that OPEC+ was laying a trap, hence his humiliating and self-defeating clown show of a trip to Saudi Arabia in July, a trip which predictably brought no results at all and only confirmed the Saudi intentions to sabotage Democrats in November.
That sabotage isn’t only about Biden’s rhetoric in the election, where he lied and said he intended to make Saudi Crown Prince Mohammed Bin Salman (MBS) a “pariah;” it’s much more about a fundamental difference between Democrats and Republicans when it comes to Saudi Arabia and other Gulf states.
Both of the last two Republican administrations had very cozy financial relationships with the Saudi royal family. Several scandals, even if they are mild by Trump family standards, have erupted during and since the days of Donald Trump’s administration. Most of these have involved Trump’s nefarious son-in-law, Jared Kushner.
Many might have forgotten by now, but the issue of George W. Bush’s close relationship with Saudi Prince Bandar bin Saud al Saud, who was the Saudi Ambassador to the United States from 1983 to 2005, raised many eyebrows two decades ago.
By contrast, Democrats—especially Joe Biden and Barack Obama—have had relatively cool, business-like relationships with the Saudis and other Gulf states. Democrats are hardly paragons of virtue and, especially when it comes to issues of human rights and of war, are little better than Republicans in international affairs, but they simply haven’t had the same depth of corrupt relationships that Republicans have. And that means they are less profitable for Gulf monarchies.
More than that, however, Democrats are much more vulnerable to popular political pressures that press the US government to do more about human rights and democracy in its foreign policy. In general, these are matters to which Republican voters tend to be indifferent, or even hostile. The refusal of virtually any Republicans to speak out against Saudi Arabia in the wake of the decision to significantly raise oil prices reflects this disposition. It also reflects the fact that Republicans understand very well that OPEC is acting in their interests. I suspect the Biden administration understands that as well.
Republicans, of course, understand that Vladimir Putin is acting in their interests as well. The alignment of right-wing forces all around the world with Putin has been clear for years. Unfortunately, rather than really combat this dynamic, Democrats have chosen to politicize it. Indeed, one reason they are not pointing out the fact that OPEC is interfering in the US political process in a way that makes Russia’s 2016 actions, and those before and since then, completely insignificant by comparison is that it would expose how badly they exaggerated the very real Russian interference in 2016 in order to use that one factor to excuse the vastly more significant failures of the party itself to explain its stunning loss in that fateful election.
Here again, given the McCarthyist sensibility around the issue of Ukraine where anyone who questions US/NATO policy actions or suggests that diplomacy is a legitimate option is immediately labeled (sadly, usually by liberals) a Putin supporter, I feel the need to stress that there is no question that the OPEC+ decision to cut production, which was strongly backed by (although not originated by) Russia, is a significant economic boost to Putin just when he needs it most given his huge losses militarily, and the increasing pressure he is facing domestically.
But that’s not OPEC’s goal here, for the obvious reason that the US and European markets are so important to them. Their goal is political. It’s primarily aimed at the US election, but also at the rest of world that is increasingly seeking ways to wean itself off fossil fuels. Seeing that happen is another factor incentivizing the Saudis to try to maximize their profits now while demand is still at an all-time high.
One might ask what difference it makes if Democrats are lying about Saudi Arabia’s motives here, if it finally brings about the shift in US-Saudi relations that so many, myself included, have been demanding for so many years?
Several reasons. The most important one is that this accusation increases the irrational and irresponsible attitude toward Russia at a time when progressive forces should be promoting diplomacy to end a war that is devastating Ukraine and has already raised the threat of nuclear war to a level not seen since 1962. It’s disingenuous to claim that we are letting Ukraine decide whether there will be talks as if Volodymyr Zelenskyy is unaffected by the US and European attitude toward this question. It’s easy to forget now, but back in the early part of 2022, Zelenskyy was trying to find ways to broker peace, while the US was indifferent to those efforts but growing increasingly responsive to his requests for arms. US Defense Secretary Lloyd Austin ended those efforts by declaring, without input from Ukraine, that our real goal was not the defense of Ukraine but the “degradation” of Russian military capabilities.
So, this “nothing without Ukraine” line that Biden is currently spouting is not sincere. Now, when Zelenskyy says he will not negotiate with Russia (he actually decreed that he won’t negotiate with Putin, but that’s the same thing for all intents and purposes)—a declaration that is overwhelmingly likely to lead not to Ukrainian victory but to another endless war—the Biden Administration offers its full-throated support.
Another reason this is important is that Americans continue to fail to grasp the size and scope of electoral interference. Russia was indeed caught red-handed in 2016. Those that deny that Russia engaged in electoral interference then are either willfully blind or simply ignorant of the overwhelming evidence.
But those operations had much less effect than the sort of manipulation of our discourse that, for example, Israel engages in through lobbying groups like AIPAC, the American Jewish Committee (which, it must be noted, also boasts of its long-standing ties to the Persian Gulf), and other pro-Israel groups. The United Arab Emirates is another, similar example, as is Qatar, both of which fund many of the institutions in this country devoted to discussion of its Middle East policy.
But this effort by the Saudis to affect our election by manipulating gas prices is a massive incident of direct electoral interference. By elevating the gains for Russia from what they are—a significant side effect, but one the Saudis are indifferent about—to the prime motivation for the cut in oil production that is already sending prices at the pump rocketing upward with the worst yet to come obscures Americans’ ability to understand just how much they are being pushed toward a certain electoral outcome by a foreign country.
Saudi Arabia is a country that is not now, and has never been, a true ally of the United States in anything but the most transactional sense. We need to be rid of them, but not because of Russia; because of the Saudis themselves.
Some of my recent articles you might also find interesting:
The return of the two-state solution illusion
https://mondoweiss.net/2022/09/the-return-of-the-two-state-solution-illusion/
Rebutting AIPAC’s case for war with Iran
https://mondoweiss.net/2022/09/rebutting-aipacs-case-for-war-with-iran/
AIPAC declares war on any support of Palestinian human rights
https://mondoweiss.net/2022/07/aipac-declares-war-on-any-support-of-palestinian-human-rights/
We need to discuss how Biden is handling Ukraine, not stifle the debate
https://mjplitnick.medium.com/we-need-to-discuss-how-biden-is-handling-ukraine-not-stifle-the-debate-7c0032c4b0b3