The US president, Joe Biden, has warned Saudi Arabia that there would be terrible consequences if they continue with their oil production cut.
After defying warnings issued by Washington DC, it looks like both the US and Saudi Arabia would have to reevaluate their relationship.
Biden made these remarks on Tuesday, and there are plans to cut ties with the oil-producing country.
Democratic Senator Bob Menendez has already suggested that the US should freeze every relationship they had with Saudi Arabia, including the selling of arms.
CNN reported on Wednesday last week that Saudi Arabia, in collaboration with Russia, had entered into a new agreement to slash oil production by 2 million barrels per day.
Before the Saudi Arabia government decided, the US had tried everything to convince them not to make that decision.
The energy minister of Saudi Arabia, Abdulaziz Bin Salman, said their decision was in their government’s best interest.
According to his words, the government’s interest comes first before they can consider other countries.
“We are concerned first and foremost with the interests of the Kingdom of Saudi Arabia,” Abdulaziz said.
The oil production cut was even more than analysts had predicted, and it is the most significant oil production cut since the pandemic.
From what professionals are saying, it seems those in charge of the Kingdom of Saudi Arabia wanted to protect their economy from fluctuating oil prices.
The Kingdom of Saudi Arabia depends heavily on its oil trade, and they are trying to avoid a similar problem of 2008. Then there was a global recession, and oil prices made OPEC make emergency decisions and actions.
“This cut seems to be a proactive measure to hopefully avoid a price crash requiring a sudden cut as the US Federal Reserve continues to hike interest rates,” Ellen Wald, a senior fellow at the Atlantic Council in Washington DC, said.
US Reaction to the Issue
The reaction from the Whitehouse has been furious, with President Joe Biden saying that the Kingdom of Saudi Arabia will surely face the consequences of its actions.
When CNN approached the US president for a statement, he said that he wasn’t going to disclose actions the US plans to take.
“I’m not going to get into what I’d consider and what I have in mind. But there will be consequences,” Biden said.
He also mentioned that those consequences would likely come after the midterm elections. “When the House and Senate get back…there’s going to be some consequences,” he said.
Apparently, experts and political analysts predict the Biden administration would resort to lending support to the bipartisan NOPEC Bill, which could potentially expose members of OPEC.
With such exposure, the members of OPEC will have to face antitrust lawsuits and thus will revoke immunity from the organization’s national oil companies.