The Biden administration asked Saudi Arabia, the de-facto leader of oil producer group OPEC, to delay its decision on oil output by a month, the kingdom said in a statement.
The Saudis declined, and in early October OPEC+ — which includes non-OPEC oil exporters like Russia — announced its largest supply cut since 2020, to the tune of 2 million barrels per day starting from November. That means tighter supplies and higher prices at a time of already high inflation and worries of global recession, which angered U.S. lawmakers who are now calling for a “reevaluation” in relations with the Saudi kingdom.
Notably, Biden’s request would have delayed the decision until after the U.S. midterm elections.
In a statement dated Wednesday, the Saudi government defended its move and said all OPEC decisions are based on economic forecasts and needs.
“The Government of the Kingdom clarified through its continuous consultation with the US Administration that all economic analyses indicate that postponing the OPEC+ decision for a month, according to what has been suggested, would have had negative economic consequences,” the statement read.
The White House has not commented on nor confirmed the Saudi claims concerning the Biden administration’s request for a one-month delay on the OPEC+ decision. A spokesperson was not immediately available for comment when contacted by CNBC.
On Tuesday, President Joe Biden said that there would be “consequences” for Saudi Arabia’s oil production cut, which the kingdom is carrying out in coordination with other OPEC members and non-OPEC allies like Russia. Many in Washington saw this as a snub and a blatant display of siding with Moscow.
U.S. lawmakers have urged the cutting of military sales to Saudi Arabia, America’s top weapons buyer, and are encouraging the passing of anti-trust legislation that would go after OPEC.
Riyadh rejected the accusations of making any politically-motivated moves.
“The Government of the Kingdom of Saudi Arabia would first like to express its total rejection of these statements that are not based on facts, and which are based on portraying the OPEC+ decision out of its purely economic context. This decision was taken unanimously by all member states of the OPEC+ group,” the Saudi government statement said.
“The Kingdom affirms that the outcomes of the OPEC+ meetings are adopted through consensus among member states, and that they are not based on the unilateral decision by a single country. These outcomes are based purely on economic considerations that take into account maintaining balance of supply and demand in the oil markets.”