Opinion: Biden’s punches don’t work

Editor’s note: David A.AndelmanCNN collaborator, twice winner of the Deadline Club Award, is Chevalier of the Legion of Honor, author of “A Red Line in the Sand: Diplomacy, Strategy, and the History of Wars That Could Still Happen” and blogs about Andelman unleashed. He was previously correspondent for The New York Times and CBS News in Europe and Asia. The opinions expressed in this commentary are his own. See more opinions on CNN.



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So much for getting closer to the Saudis – President Joe Biden is high profile punch with Mohammed bin Salman during a trip to the Middle East in July turned into something of a slap in the face from the crown prince.

This week OPEC+ announcement that it would reduce oil production by 2 million barrels per day – designed, by most accountsby Saudi Arabia and Russia – is already causing a cascade of toxic geopolitical change.

A host of questions all converge here at this epiphanic moment. There is the European Union, which suddenly has to determine how it could still implement its price cap on Russian crude.

There’s the oil producer Venezuela, which, suddenly from OPEC, looks to the United States more as a attractive business partner than a hemispherical pariah.

There is the prospect of a resurgence of coal as a fuel and its impact on our entire planet.

And then there’s soaring oil prices, a source of new revenue that Russia desperately needs to continue its war in Ukraine, where a lightning counter-offensive is underway. hurt President Vladimir Putin on the battlefield and at home.

President Joe Biden and Saudi Crown Prince Mohammed bin Salman shake fists upon Biden's arrival at Al Salman Palace in Jeddah, Saudi Arabia on July 15.

For now, the most immediate fallout will be on oil prices and revenues. Designed to spur a reversal in the trend that sent oil prices crashing to $80 a barrel vs just over $130 a barrel in Marchthe impact on pump prices and inflation in the United States on the eve of the midterm elections is already being felt.

oil monitor Platts pegged the price of crude at $93.73 a barrel on Oct. 4, up 11% from $84.63 on Sept. 26, when rumors of an OPEC cut began circulating. But that’s still down from the June 14 peak of $132.06 a barrel.

Morgan Stanley analysts raised their oil price estimates to $100 a barrel hours after OPEC’s announcement. Such a reversal will inevitably have an impact on gasoline prices and inflation.

At the same time, the EU seems quite determined to implement a price cap on Russian crude oil for its 27 member countries. This complex formula – designed to reduce the revenue Putin can generate to continue his war in Ukraine – would penalize any shipping company carrying Russian crude, withholding insurance for its cargo or vessels if the price of the oil it carries is higher than the EU limit.

With OPEC cutting production across the board, this could further aggravate the pain for European customers, as oil prices from other oil-producing nations could rise significantly with supply cuts.

At the same time, supply shortages could make the oil that Russia sells at its own bargain prices to sympathetic nations like China and India, among others, all the more attractive. If the EU succeeds in reducing the sale of Russian oil to its members, there will be that much more production available for sale elsewhere.

And if global oil prices spike as a result of supply cuts, the immediate source of Russian crude at discounted prices would be a boon to the economies of those countries.

Simultaneously, the United States began to look even more carefully for alternative sources of crude supply to fill the OPEC shortfall. The Wall Street Journal reported the Biden administration could be ready to reduce sanctions against Venezuela and allow Chevron to resume exporting from the country to the United States, with certain political conditions such as the opening of talks by President Nicolás Maduro with the leaders of the opposition.

This would have little immediate impact, but could possibly be part of a larger pattern of shifting global oil imports away from Russia. Indeed, at its peak in the 1970s, Venezuela was producing 3.8 million barrels a day, according to Forbes. By August of this year, that figure had fallen to 723,000 barrels, according to the Warsaw Institute.

Beyond oil, European countries have already gradually weaned themselves off Russian gas since the invasion of Ukraine. (Early September Russia cut off the gas supply to Europe via the Nord Stream 1 pipeline indefinitely, citing an oil leak).

With With such severe brakes – and now the rising price of oil that would have replaced Russian natural gas in some parts of the world – other energy sources are suddenly starting to look much more attractive, with potentially catastrophic impacts on the environment.

Already, countries like Germany, France and the UK are restarting or considering switching back to coal-fired power plants – one of the dirtiest fuels – to help fill gas shortages. OPEC budget cuts and price hikes could only accelerate this environmentally dangerous trend.

OPEC’s production cuts could – in fact, should – backfire on Saudi Arabia and its complicit partners. It is high time for the United States and its allies to step up the pressure. Congress has already considered legislation called NOPEC (No Oil Production and Export Cartels) that would allow the US to revoke the sovereign immunity of OPEC oil producers like Saudi-owned Aramco and allow the US Attorney General to sue them for damages -interest in federal court.

Moreover, there is a growing feeling in Congress for reevaluate America’s broader relationship with Saudi Arabia and in particular the vast arms sales to the kingdom.

Rep. Ro Khanna went further, telling CNN he wants the Biden administration to stop all sales of aviation parts — and prevent Raytheon and Boeing from making Saudi sales. Both are major arms suppliers to Saudi Arabia.

And Rep. Tom Malinowski said Political booklet this week that he will introduce legislation to “mandate the withdrawal of US troops and missile defense systems” from Saudi Arabia and the United Arab Emirates. The language comes straight from a 2020 GOP-sponsored bill, which makes it much harder for Republicans to vote “no.”

As Saudi Arabia prepares to resume a deadly and protracted war in Yemen against Iranian proxies (Next the expiration of a shaky truce earlier this month)the Saudis urgently need equipment that the United States can provide and that few other countries – certainly not Russia these days – can offer.

Clearly, the Saudis have thrown down a gauntlet alongside whoever has been on the table for a long time from Russia. It is time for the United States to strike back. From my visits to the kingdom for decades, I know that its leaders respect a trait of allies and enemies alike: the strength and the will to stick to their convictions.

Edward N. Arrington