2022 in review: The year that broke US relations with OPEC+
After a tumultuous year for US-Saudi ties, there is little reason to expect US-OPEC+ tensions to ease in 2023.
Last October, OPEC+, a group of 23 oil-producing countries including Saudi Arabia and Russia that controls 40% of world oil production, announced that it would cut production by 2 million barrels per day — roughly equivalent to 2% of the world’s oil supplies. The group said that the production quota would continue for 14 months until the end of 2023 and attributed the cuts to the “uncertainty that surrounds the global economic and oil market outlooks.”
US President Joe Biden immediately condemned the decision, arguing that the production cuts amounted to an economic lifeline to Russian President Vladimir Putin’s war effort in Ukraine. Biden’s administration took particular issue with the role of Saudi Arabia, the world’s largest oil producer and de facto leader of OPEC+, and vowed “consequences.”
Saudi Arabia knew the oil production cuts “would increase Russian revenues and blunt the impact of sanctions. That is the wrong direction,” White House National Security Council spokesperson John Kirby said after the meeting. “We are reevaluating our relationship with Saudi Arabia in light of these actions.” Saudi Arabia’s government responded that OPEC+ member states had unanimously agreed to the cuts and said the decision was made for “purely economic reasons.”
The cuts and war of words that followed may have marked a new low for US-OPEC+ relations. “There were already tense relations with the Biden administration and many members of OPEC+ and this just sparked it off,” Paul Sullivan, a nonresident senior fellow with the Atlantic Council's Global Energy Center, told Al-Monitor.
