Last week, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, led by Saudi Arabia and Russia, said they would cut oil production by 2 million barrels a day, the largest reduction since the start of the pandemic, in a move that threatens to drive up gasoline prices just weeks before the U.S. midterm elections. The group announced the production cut following its first in-person meeting since March 2020. The cut is equivalent to about 2% of global oil demand.
The Biden administration slammed the decision in a statement, calling it “shortsighted” and saying it hurts some countries already struggling with high energy prices.
Production cuts will begin in November.
Democratic member of the Senate Foreign Relations Committee, Chris Murphy, said in this regard that “there must be consequences” after Saudi Arabia and a cartel of major oil producers decided to drastically cut production. oil last week.
Senate Foreign Relations Chairman Bob Menendez, who has veto power over foreign arms sales, also promises to block all future arms sales to Saudi Arabia and urges the administration Biden to immediately freeze all aspects of US cooperation with the kingdom in response to his decision to cut oil production amid a global energy crisis triggered by the war in Ukraine.
To learn more about these issues, we contacted Professor Hossein Askari, economist, professor emeritus of trade and international affairs at George Washington University. Here is the text of the interview with him:
How serious are the differences between the United States and Arabia?
Not as much as most think. The United States is only interested in human rights and corruption in Saudi Arabia. The US says things against Saudi war crimes in Yemen, but still sells them bombs, refuels their planes and gives them the intelligence they need to prosecute their crimes. But he finds Saudi Arabia’s growing relationship and cooperation with Russia and China highly problematic, as evidenced by its refusal to maintain oil production, which clearly supports the Russian war effort in Ukraine. The United States is used to giving the Al-Saud what it needs and wants full cooperation from them in return. But MBS is going his own way and sending Saudi money to Kushner and Mnuchin to get the support he needs in the United States.
Why has the United States always turned a blind eye to human rights abuses by Saudi leaders?
Saudi Arabia has many backers in the United States. There are dozens of major US companies exporting goods and services to Saudi Arabia, from defense contractors to IT companies to medical equipment. There are many financial institutions that receive Saudi deposits and intermediate Saudi funds. There are dozens of engineering companies, consulting firms and law firms that provide services to Saudi clients. These entities support Saudi interests in the United States. They are lobbying Congress and the White House to maintain their business interests in Saudi Arabia. Thus, Saudi Arabia gets its way to the United States. The business of the United States is business. Money not human rights rules in America and countries like Saudi Arabia and UAE throw their money and get what they want. Look, they brutally dismembered Khashoggi and yet Biden went to MBS, begging him to produce more oil to bring down prices at the pump because that’s what most Americans care about.
Today we see the world, even US allies in the Middle East and Europe, resisting the norms and orders created by the United States after the World War. Considering the developments around the world, how do you see the future of American hegemony around the world? Will we see changes in the current world order?
The United States has a number of powerful weapons that the rest of the world has not matched and does not want to join together to match. First of all is its economy. It’s the biggest. It’s backed by the dollar and the US can print whatever it wants. And it has the deepest financial markets. These economic and financial forces allow the United States to unilaterally impose primary and secondary sanctions on whomever it chooses. This power is arguably even more powerful than the powers of his others. Second, America has the best intelligence services backed by unprecedented technology. He uses his intelligence to support or undermine his friends and enemies around the world. It’s safe to say that Jared Kushner used his top secret access to help his budding friend MBS stay in power. Third, America has the strongest military in the world. When you combine it all, it’s hard to see America’s global influence falling off a cliff. Yet I agree that the United States is losing its soft power and this could ultimately undermine its future hegemony. The surest way to create a multipolar world is for countries like China, Russia, Brazil, Poland, etc. unite and create an alternative to the dollar and oppose US sanctions by fighting back every time the US imposes sanctions and encroaches on secondary sanctions.