Home Business Between Putin and Biden, Riyadh caught in an economic crossfire

Between Putin and Biden, Riyadh caught in an economic crossfire

Insiders revealed that the oil production surges decision made by OPEC+ in June, which had Saudi Arabia backing it up with fervor, had the subtle motive that U.S. authorities wanted more oil but less involvement from Russia.

U.S. President Joe Biden is scheduled to visit the Middle East, including Riyadh next month, flagging the trip as his first visit since he was elected. Previously, on 2nd June, the President was overseeing a meeting of OPEC+ who surpassed expectations of oil output following the discussion—such development was certainly approved by Biden.

Meanwhile, Riyadh has full intentions to fix its diplomatic relations with the U.S., while simultaneously making sure its Russian ties do not sever.

An anonymous source shed some light on this matter by mentioning that the U.S. was demanding a reprimand, and it was followed by Saudi Arabia which had a discourse with Russia before saying it was an agreeable move. 

Following Russia’s war aimed at Ukraine, Moscow was receiving immense backlash from the U.S. and allied countries who tutted at its actions by imposing strict sanctions; amidst this, it was difficult for Riyadh to consult Moscow without raising too many eyes toward them.

Riyadh in particular is balancing on a tightrope as Biden may pressurize it to cut Moscow’s membership from the OPEC+, which might happen during his four-day trip to the Middle East from 13th to 16th July since a majority of Democrats stand by it.

However, it is no easy task to consider since cutting ties meant throwing away a dutiful effort from Saudi to pull Russia into their oil manufacturing group.

Riyadh had long tried to pursue connections between these powerhouse oil producers, way before 2016, when OPEC+ was made.

One such delegate from the organization had commented that Russia’s involvement in the group was crucial, since they needed to heighten leverage in the crude sector, and this isn’t politically motivated at all.

Another anonymous source unveiled that Moscow found it beneficial to be a member of OPEC+ during these rough days when Western countries wanted anything but, after its aggressive behavior toward Ukraine. The source also added that the Saudi consumers are having a feast over expensive rates while Russia needed assured backup from the OPEC+ since they all share the common goal of economic stability. After all, nobody wanted to deal with volatile markets.

It is also rumored that the way OPEC+ functioned wouldn’t change before November when U.S. midterm elections swung their way. It is possible that the Republicans may attempt to score positions in the U.S. House of Representatives, and away from Biden’s party.

In June, OPEC’s partnership with OPEC+ was said to be a “hopeful sign of balance regardless of any turbulence caused by geopolitical aspirations,” according to Mohammad Barkindo, the Secretary-General of OPEC.

A little more insight on this matter is that the Saudis have done their best to shepherd Russia into the OPEC circle since 2001, but it wasn’t before 2016 that there was a mutual agreement between them to work together and set standards for steadily raising oil prices ever since.

Gary Ross, a renowned observer of OPEC, had said that Saudi Arabia will have to ponder on full deliberation over the matter since it has spent over 2 decades trying to pull Russia into the oil market production group.

So even if Biden brought forward the suggestion of cutting them out from the OPEC+, it has a 50-50 result margin of probability.

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