Last week, Brent crude topped $90 per barrel for the first time since last November, and WTI climbed to an 11-month high, too. The reason: Saudi Arabia and Russia said they would extend their oil supply cuts until the end of the year.
The decision was hardly unexpected. What was unexpected was the length of the extension. It suggested that the biggest oil producers in OPEC+ were done playing around. They wanted higher prices, and they were going to get it. With that move, the thread on which U.S.-Saudi relations hang got thinner and frayed.
Last year, as oil and fuel prices soared amid U.S. and EU sanctions on Russia for its invasion of Ukraine, the Biden administration sold close to 200 million barrels of crude from the strategic petroleum reserve to arrest the rally.
It worked, too, not least because it turned out the ample sanctions did not put a dent into Russia’s oil exports, which brought prices down. The White House took the credit. Now, just a year before the next elections, prices are once again up, and the SPR is at a 40-year low. And the Saudis have clearly shown their priorities no longer align with those of their overseas friends.
“The Saudis don’t have a lot of friends in Washington right now. There’s absolutely the risk that they start to become ‘Exhibit A’ if Washington wants to blame someone for high pump prices or a slowing economy again,” Eurasia Group analyst Raad Alkadiri told the Financial Times this month.