US shrugs off Saudi oil cuts

摘要

Higher oil prices following production cuts enacted by Riyadh and Moscow are not getting in the way of wider US-Saudi co-operation for now-but next year’s presidential election in the US is likely to reintroduce familiar complaints about Saudi oil policy if prices keep rising.The two governments have been working to arrange a meeting between President Joe Biden and the Saudi prime minister,Crown Prince Mohammad bin Salman,on the sidelines of the G20 summit in India on 9-10 September.Any leaders’meeting is likely to be brief,given the broader summit agenda,but the latest Saudi announcement on extending its 1mn b/d cut by three months has not affected US planning for it,White House national security adviser Jake Sullivan said on 5 September.”We’ll make our decisions on[a meeting]on the basis of a far broader set of considerations than any one policy,”he added.Riyadh and Washington have tried their hand at oil market management since Russia’s full-scale invasion of Ukraine sent global crude price benchmarks and US retail gasoline prices soaring in spring 2022.Biden’s administration last year ordered an unprecedented drawdown from the Strategic Petroleum Reserve in an effort to take the heat out of US retail gasoline prices,which in June 2022 reached a record high-in nominal dollar terms-of $5/USG.The US has since worked with its G7 allies to craft a sanctions policy that kept Russian oil flowing at discounted prices to consumers in emerging economies,in an effort to prevent an oil supply shock while still aiming to constrain Moscow’s oil revenues.