The “Financial Times” newspaper has raised questions about the potential escalation of tensions between Saudi Crown Prince Mohammed bin Salman and the Biden administration following the decision to extend oil production cuts. The paper pointed to the decision by Saudi Arabia and Russia to voluntarily extend production and export cuts until the end of the current year. This move led to oil prices rising to over $90 per barrel for the first time in 2023.
The recent announcement implies that Saudi Arabia’s oil production is likely to remain at 9 million barrels per day until the end of December, 25% less than its maximum capacity of 12 million barrels per day. The report by the “Financial Times” states that Saudi Arabia, leading the OPEC+ group along with Russia, has removed an additional one million barrels per day from the global market since July, initially described as a temporary measure.
Russia has also voluntarily reduced exports in recent months and is committed to reducing exports by 300,000 barrels per day until the end of the year. This move threatens to exacerbate global inflation concerns. The decision has made efforts by two of the world’s largest oil producers to boost prices, even as most countries grapple with rising energy costs.
The report suggests that this could strain relations with the White House, which has criticized Saudi Arabia’s close cooperation with Russia, especially after Moscow’s extensive invasion of Ukraine and its use of natural gas supplies as a weapon against Europe.
The Biden administration, keen to keep fuel station prices under control ahead of next year’s presidential elections, has found inflation and fuel costs to be primary targets of Republican attacks. The report also highlighted the Crown Prince’s desire to raise oil prices to fund his economic reform program and shed light on the role of Prince Abdulaziz bin Salman, the Saudi Energy Minister, who has implemented a more stringent Saudi oil policy, despite U.S. pressures to increase production to help alleviate inflation.