As the US-Saudi oil spat intensifies, what are Biden’s options?

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CNN
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The Saudi-American relationship appears to have hit rock bottom.

After a move by the Saudi-led OPEC+ oil cartel to cut oil production, which could see inflation in the United States soaring just weeks ahead of the midterm elections, President Joe Biden told CNN’s Jake Tapper that it’s time for the US to rethink its relationship with Saudi Arabia.

On Wednesday, Saudi hit back, saying a US request to postpone the decision to cut production “for a month” would have had a negative economic impact. The idea of the administration asking the Saudis to delay the cut until after the elections has Biden’s critics seething.

The White House responded Thursday by saying Riyadh was trying to “spin” the matter. The National Security Council’s strategic coordinator for communications, John Kirby, reiterated that the US is “reevaluating our relationship with Saudi Arabia in light of these actions.”

The White House and the Democratic party are on a mission to punish the kingdom. A host of measures have been suggested, all drastic moves that analysts say could seriously dent the US’ eight-decade partnership with the kingdom – if they ever materialize.

Riyadh has suggested that the threats are pre-election posturing on the Democrats’ part.

“When you are in the election season, what some call ‘the funny season’, a lot of things are said and a lot of things are done that may not make sense at another period of time,” Adel al-Jubeir, minister of state for foreign affairs, told CNN’s Becky Anderson. “I hope this is what we’re dealing with here.”

Here’s a look at the options US politicians are considering, and how viable they are:

Passing the NOPEC Bill

Almost immediately after the decision to cut oil production, the White House said President Biden would “consult with Congress on additional tools and authorities to reduce OPEC’s control over energy prices,” which was widely interpreted as a threat to back the bipartisan NOPEC bill that could spell the end of the OPEC cartel.

The bill is meant to break oil prices from the grip of a few countries by exposing OPEC states to antitrust laws. If passed, the bill would lift immunity from OPEC members and their oil companies and sue them for colluding to boost prices.

A US Senate committee passed the bill in May. But in order to become law, it would still need to go through the full Senate and House and be signed by the President.

A survey by Morning Consult and Politico found that just under half of US voters would support the NOPEC bill, including over half of Democrats and two in five Republicans.

But passing the bill would not be without consequences to the US itself, analysts say.

“I think this will be a chilling effect on a lot of the oil and gas industry,” said Karen Young, senior research scholar at the Columbia University Center on Global Energy Policy, “and will make all kinds of joint ventures and investments with national oil companies more complex.”

There are also concerns that removing a cap on production would sink oil prices so low that the US oil industry could go out of business. Saudi Arabia has the lowest oil extraction costs in the world, so it can continue to make a profit at very low oil prices. Extraction costs in the US are significantly higher.

The American Petroleum Institute, a trade association for the oil and natural gas industry, has come out strongly against the bill, saying it would be detrimental to US diplomatic, military and business interests. The US Chamber of Commerce said in May that the legislation “would have zero impact at taming gasoline prices.”

Cutting US arms sales to Saudi Arabia

Senate Foreign Relations Committee Chairman Bob Menendez, a New Jersey Democrat, this week called for an immediate freeze in US-Saudi relations, including putting an end to arms sales beyond what is needed to defend US personnel.

While a number of politicians showed their support, others expressed concern, saying it would only push Saudi Arabia further into the arms of Russia.

The US is the world’s largest arms exporter, with foreign military sales averaging about $47 billion in the 2021 fiscal year. Saudi Arabia is a key client, accounting for 24% of all US arms sales, according to a 2021 report by the Stockholm International Peace Research Institute.

“The average American [isn’t] aware… [that] this is a commercial market. And it’s a market in which the Saudis kind of pay top dollar,” said David Des Roches, a professor at the Near East South Asia Center for Strategic Studies and former Pentagon official who worked on the Middle East. “The Saudis are actually kind of subsidizing our system of defense exports for everybody else,” he said.

Young believes that a complete freeze of arms sales to Saudi Arabia is unlikely to materialize. The kingdom might instead see other restrictions on the type of weapons sold, she said.

While there is no immediate replacement for US defense systems, added Young, increased US restrictions could provide “inroads” to other suppliers.

Saudi Arabia has already been trying to diversify its arms sources, analysts say, and may resort to buying weapons elsewhere should the US further restrict access to American arms.

“It has longstanding relations with the UK, France and China and is also establishing relations with Brazil, South Africa and others,” said Ali Shihabi, a Saudi author and analyst. “This whole circus is just convincing Saudi policymakers that they can no longer rely primarily on the US… The era of putting all its eggs in the US basket is over for the kingdom.”

Analysts agree however that replacing the US defense infrastructure is impossible in the medium term.

Withdrawing US troops from Saudi Arabia and the UAE

Three Democratic lawmakers last week introduced a bill to “end US protection to Gulf partners” by withdrawing troops from Saudi Arabia and the United Arab Emirates, another member of the OPEC+ cartel.

“Both countries have relied on an American military presence in the Gulf to protect their security and oil fields,” read the statement, adding that there is no reason US troops and contractors should continue protecting “countries that are actively working against us.”

The UAE hosts approximately 3,500 US military personnel, and while the US withdrew most of its troops from Saudi Arabia in 2003, it still provides substantial arms support that aims to combat attacks by Yemen’s Iran-backed Houthis amid the group’s war with the Saudi-led coalition.

But a US troop withdrawal is unlikely, experts say, as it would leave a vacuum in the region that could be filled by US adversaries such as Iran, China and Russia.

“When the Americans talk about security in the Gulf, many forget it’s to protect the free flow of oil and gas from the Gulf, not protect the Saudi royal family,” said Shihabi. “This serves US interests and gives it leverage over not only countries like China, which depend on oil coming from the Gulf, but also Japan, India and Europe.”

The military officers stationed in Saudi Arabia have helped the kingdom avoid hitting civilian targets in its war in Yemen, said Des Roches, adding that severed defense relations could take years to rebuild and would cause the US reputational damage as a security partner.

What other options are there to punish the Saudis?

Experts say all the options cited by US politicians to punish Saudi Arabia are unrealistic and unlikely to materialize, and the White House may instead choose to take a much less significant, face-saving measure.

“The Biden administration is elevating this tension for political gains, and it is dangerously short-sighted,” said Young. “It makes the relationship solely about oil when all along the administration had tried to make it about something larger and more historic.”

“We may end up with a watered-down statement on arms sales and a rebuke of ‘values’,” she said.

High level meetings between Saudi and American officials could also be halted for some time, said Des Roches. “The work is all done at a lower level anyhow,” he said.

“There’s a reason why this relationship has been uninterrupted since the days of Franklin Roosevelt,” he added. “It’s a relationship based on interests, and the interests remain unchanged.”

At least 23 children between the ages of 11 and 17 were killed in the last ten days of September during protests across Iran, Amnesty International said in a statement on Thursday.

The child death toll reported by Amnesty does not include any of those killed during protests in October, among them a 7-year-old boy who died in his mother’s arms on Sunday after security forces fired into a crowd of demonstrators, according to Oslo-based Kurdish rights group Hengaw.

CNN cannot independently verify the death toll.

Nationwide protests have gripped Iran for weeks following the death of 22-year-old Mahsa Amini, who died three days after being arrested by “morality police” and taken to a “re-education center.”

Here is the latest on this developing story:

  • Social media accounts circulated calls for nationwide protests this week. Videos posted on Wednesday showed demonstrations across several Iranian cities.
  • Police used tear gas against protesters in Tehran on Wednesday amid a heavy security presence near Tehran University and Kaj Square, an eyewitness said. Bookshops and offices near the university shut doors as anti-riot police also fired rubber bullets at protesters on the street, according to eyewitnesses.
  • “Major disruption” to internet access was reported in Iran on Wednesday morning, according to internet watchdog NetBlocks, noting that “the incident falls outside the previous schedule of curfew-style telecoms blackouts.”
  • An Iranian official on Tuesday said that school students participating in street protests are being detained and taken to mental health institutions. The establishments holding the students are meant to reform and reeducate the students to prevent “anti-social” behavior, he said.

US says Iran nuclear deal is ‘not our focus right now’

The Iran nuclear deal is “not our focus right now,” State Department spokesperson Ned Price said Wednesday, noting the administration was instead concentrating on supporting the protesters in Iran as efforts to restore the nuclear deal have hit yet another impasse. “The Iranians have made very clear that this is not a deal that they have been prepared to make, a deal certainly does not appear imminent,” Price said at a department briefing.

  • Background: Then-US President Donald Trump abandoned the nuclear deal between Iran and six major powers in 2018 and unilaterally reimposed economic sanctions that have hobbled Iran’s economy by curbing its oil exports. A year later, Tehran reacted by gradually violating the deal’s nuclear limits, reviving fears that it may be seeking to obtain an atomic weapon, which it denies.
  • Why it matters: A potential deal could ease the rally in oil prices by lifting sanctions on Iran’s oil exports at a time when inflation has soared. Saudi- and Russian-led oil cartel OPEC+ last week agreed to cut production by 2 million bpd, angering the Biden administration that is preparing for midterm elections next month.

Iraq names president and prime minister, ending a year of political deadlock

Iraq’s parliament elected Kurdish politician Abdul Latif Rashid as president on Thursday, according to an official statement. His election ends a year-long political deadlock, the longest the country has seen since 2003. Rashid won 162 votes out of a total of 269, beating Barham Salih. The new president appointed as his prime minister Mohammed Shia Al-Sudani, who has one month to form a government.

  • Background: Thursday’s parliament session came a year after an election in which populist Shiite Muslim cleric Muqtada al-Sadr was the biggest winner but failed to rally support to form a government.
  • Why it matters: Al-Sadr withdrew his 73 lawmakers in August and said he would quit politics, prompting the worst violence in Baghdad for years. His loyalists stormed a government palace and fought rival Shi’ite groups, most of them backed by Iran and with armed wings. He hasn’t declared his next move and many fear further unrest.

Leading Palestinian factions sign reconciliation deal, aiming to pave way to elections

More than fifteen years after a violent breakdown of relations between leading Palestinian factions Hamas and Fatah, Algeria has brokered an apparent reconciliation, with the signing of a unification agreement announced on Thursday.

  • Background: The agreement, which has been seen by CNN, also calls for presidential and legislative elections in Gaza and the West Bank, including occupied east Jerusalem, within a maximum period of one year from the date of signing the declaration. The last elections in the Palestinian territories were in January 2006. Hamas – which controls Gaza – and Fatah, the leading party in the Palestinian Authority which governs the West Bank, are among 14 Palestinian factions to sign the document. The “Algerian declaration” also calls for a united Palestinian National Council, which Palestinians hope will end years of division.
  • Why it matters: Tensions are high in occupied East Jerusalem and the West Bank. This has been the deadliest year for both Palestinians and Israelis since 2015, and Israel is only two weeks away from its fifth election in less than four years, which may pave the way for former Prime Minister Benjamin Netanyahu to come back to power.

Football fans headed to the Qatar World Cup can rest assured that if they can’t hold their liquor, organizers will have a special area dedicated to bringing them back to sobriety.

Qatar’s World Cup Chief Nasser Al Khater said in an interview that anyone who drinks beyond their tolerance will be looked after.

“I know that there are plans in place for people to sober up if they’ve been drinking excessively… I think it’s a good idea,” he said. The decision may put to rest concerns about a harsh crackdown on drinking during the tournament in a country where public consumption is restricted.

Al Khater added that the measure is in place so that people would not harm themselves or others while under the influence of alcohol.

Qatar will be the first Muslim-majority country to host the World Cup. Although the tournament is usually held in the summer months of June and July, during the European club season, the calendar was pushed to November and December to avoid the scorching summer temperatures of the Gulf.

The Qatar World Cup is due to kick off on November 20 with the first game pitting the host nation against Ecuador.

By Mohammed Abdelbary





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