The Organization of the Petroleum Exporting Countries (OPEC) headed by Saudi Arabia and the non-OPEC oil producers represented by Russia held their 33rd ministerial meeting in Vienna, the capital of Austria, on October 5, and decided to cut the daily oil production by 2 million barrels starting in November and lasting till December 2023. The international crude oil futures price shot up at the news, and Washington expressed its disappointment at Saudi Arabia, with some radical Democratic senators vowing vengeance.
Biden visited the Middle East and asked Saudi Arabia for more oil supply in July this year, after which Uncle Sam, along with its European allies, kept pressuring Saudi Arabia and UAE to increase production, but to little avail. The announcement by OPEC and non-OPEC oil producers to slash their production is an unmistakable declaration of their position, which many US democrats have slammed as stabbing America in the back.
Now that Washington is warming up for the mid-term election, the oil producers’ latest decision has triggered a new round of quarrels. The Republicans called it a huge diplomatic failure as the US was seriously humiliated in the Middle East and is unable to control the economic woes resulting from the rising inflation, while Democrats have bombarded Gulf countries including Saudi Arabia. On October 6, three Democratic senators proposed a bill to withdraw American troops and missile defense systems from Saudi Arabia and UAE; on October 10, Bob Menendez, chairman of the Senate Foreign Relations Committee, urged the US government to freeze all cooperation with Saudi Arabia, including arms sales and security cooperation.
The White House was therefore obliged to take a series of countermeasures. First, it released more strategic oil reserves to keep down the oil price. Then it asked its energy secretary to take extra measures to increase domestic oil output immediately. It also considered relaxing the sanctions against Venezuela and allowing it to export oil. At last, it asked senior senators of both parties to push the “No Oil Producing and Exporting Cartels Act” to put pressure on OPEC. Overall, America’s strategic oil reserve has fallen to the lowest level in nearly 40 years and cannot make a bigger contribution, while other measures are too slow to be able to effectively address the immediate problem.
The landscape of major-country competition is in constant change now. With America’s strategic forces contracting, the Middle East is showing three trends. First, peace and development have gradually become the common demand of regional countries after prolonged conflicts, with the Saudi-Iran relations and UAE-Israel relations easing. Second, the effects from external forces on the Middle East almost reached the equilibrium, while the regional countries are getting more strategically independent. Third, regional powers represented by the Gulf countries are searching hard for a path of reform and development suitable for their own conditions and seeking a new, vantage point amid the changes. Against such a complex background, the OPEC and non-OPEC oil producers’ decision to cut oil production is just an integral part of Saudi Arabia and other Middle Eastern countries’ efforts to break new ground, clear new space, and maximize their interests in a more independent posture.
At present, countries like Saudi Arabia and UAE must break the “oil curse” (oil curse means oil-rich countries haven’t achieved good development in the process of oil exploitation but have instead left their people in poverty and misery), the scarcity of human resources, and other dilemmas internally. They must also engage in sustained competition with America and other oil producers and tackle the complicated regional chaos externally. In recent years, Saudi Arabia and UAE, with the transformation of the energy industry as the pivot, have tried to reform their finance and taxation, labor market, society and culture, and other sectors, eager to inject themselves with a new, homegrown drive for development.
However, the US still holds sway over the Middle East despite its shift of strategic focus and hopes to throw its weight around through “offshore balance”, while Saudi Arabia won’t easily drift apart from America either because it still depends on US’ security protection. It’s foreseeable that the decision of oil production cut may be altered because of interests – just as it has been made.
(The author is from the School of Politics and Public Administration, Xinjiang University)
