OPEC oil cuts: Good for Trump, a heavy cost to the Ukrainian people
As the missiles rained down on the citizens of Kyiv, former Russian leader Dmitry Medvedev gloated how this was just ‘the first episode’, a portent of what is to come.
The Kremlin is going to try and break civilian morale in Ukraine with attacks on power grids and dams that deprive the population of electricity and running water during the cold winter ahead.
Step forward General Sergei Surovikin with a reputation for brutality based on his use of cluster munitions, barrel bombs and even chemical weapons in Syria. His appointment is a sign that Vladimir Putin wants results no matter the cost.
But in a speech at the Royal United Services Institute on Tuesday, the head of Britain’s GCHQ intelligence agency, claimed Russia’s forces are tired and running out of ammunition.
''The question for them remains, however, whether siding with Russia in the name of protective oil market management is acceptable when the Kremlin has invaded its neighbour and is threatening nuclear war if it doesn’t get its way.''
Sir Jeremy Fleming also described the costs to Moscow of the war against Kyiv as “staggering”.
So what’s it to be? A new general who’s going to bomb Ukraine back to the Dark Ages, or a ragtag army whose soldiers refuse to carry out orders, sabotage their own equipment and accidentally shoot down their own aircraft?
The answer, as always seems the case with the ebb and flow of this conflict, is a bit of both. Yes, things haven’t being going Putin’s way, but the Russian Bear is far from done yet.
In the light of this, consider Saudi Arabia’s latest to move to cut crude oil production and thereby drive up fuel prices – despite pleas from the West not to do so.
For by going down this path what Mohammed bin Salman and his friends at the Organization of the Petroleum Exporting Countries (OPEC+) have done is to side with Putin and give a threefold kick in the teeth to those wishing to halt the brutal Russian assault and with it the suffering of the Ukrainian people.
Firstly, by inflating the price of oil, they are boosting Russian coffers as a major exporter of oil and gas, enabling the Kremlin to rain more missiles down on innocent civilians for longer and with more devastating effect.
How is that a defendable position? It isn’t, just naked self-interest.
Secondly, any rise in the cost of oil will fuel price-led inflation that has pushed up interest rates around the world, stunting economic growth.
Again, how is that helping anyone at a time of global financial crisis? It isn’t, except the oil producing countries.
Thirdly, a rise in oil prices will damage US President Joe Biden at next month’s mid-term elections and could mean the White House loses control of the Senate or House of Representatives, or both, causing political gridlock in Washington.
Now, if you’re a Republican or a fan of Donald Trump then you might welcome Biden’s poll rating going through the floor because gas prices have gone through the roof. But we’ve still got two years to go until the next presidential election and if the US is weak that is only going to strengthen and embolden Putin during that time.
Maybe that is MBS’ ploy after all. To help Trump get re-elected so he has is old friend back in the Oval Office covering his back.
But at what cost to the Ukrainian people?
As a result of last week’s OPEC+ decision, Biden said on Tuesday that the US will be re-evaluating its relationship with Saudi Arabia, a long-term ally.
“I’m not going to get into what I’d consider and what I have in mind,” he said. “But there will be consequences.”
The Saudi slap in the face for Biden came less than three months after the president visited Saudi Arabia, asking the country’s leaders to increase oil production to counter the impact of the war in Ukraine.
Instead, OPEC+ did the opposite and announced that oil production would be cut by two million barrels a day by the start of November.
There is a feeling of exasperation in Washington at the Saudi snub.
“I just don’t know what the point of the current alliance is, if we have to work so hard to get the Saudi’s to do the right thing,” said Senator Chris Murphy.
Congressman Ro Khanna believes the US should cut off arms sales to the desert kingdom.
“We give Saudi Arabia 70% of their weapons,” he said on Twitter. “For them to drive up energy prices for the American people is outrageous. It’s simple. If the Saudi-led OPEC+ doesn’t reverse their decision, the US should stop sending them weapons”.
Such a move could bring relief to war-ravaged Yemen which has been bombed by a Saudi-led coalition since 2015 with planes using weapons from US arms deals worth $64.1 billion.
There is also a mood to pass legislation in Washington that could open up OPEC+ members to antitrust lawsuits.
The No Oil Producing and Exporting Cartels (NOPEC) bill, if passed, would give the US attorney general the option to sue the oil cartel or its members, such as Saudi Arabia, in the federal court. How taking legal action against a foreign state works in practice remains to be seen but it is an indication of the strength of feeling against Riyadh which is building.
“For years we have looked the other way as Saudi Arabia has chopped up journalists, has engaged in massive political repression, for one reason,” continued Sen. Murphy. “We wanted to know that when the chips were down, when there was a global crisis, that the Saudis would choose us instead of Russia. Well, they didn’t. They chose Russia”.
MBS must crave the halcyon days of President Trump when the White House turned a blind eye to the Saudi murder of The Washington Post journalist Jamal Khashoggi in order to safeguard the arms deals and protect jobs at home.
There is no love lost between the crown prince and Biden, who called Saudi Arabia a “pariah” on the campaign trail. Now that MBS has given Biden cause - by pursuing a policy detrimental to the American economy - it’s going to be fascinating watching how this unravels.
Secretary of State Antony Blinken would only say the US is “reviewing a number of responses” and the White House was “consulting closely with Congress”, implying there might be some action on the NOPEC front.
Meanwhile, the Saudis and their friends are complaining about the “hysterical” reaction by the US, insisting that the actions of OPEC+ were intended to encourage long-term investment in oil production.
The question for them remains, however, whether siding with Russia in the name of protective oil market management is acceptable when the Kremlin has invaded its neighbour and is threatening nuclear war if it doesn’t get its way.
I know what Alla Yermachenko would say after hearing her parents had been in one the buildings destroyed in Zaporizhzhia during this week’s missile attacks.
“There’s very little hope that they’re alive,” she said. “Why are they doing this to us? What are they trying to prove? Killing old people. Why? For what? May our tears drop not on the ground but on the chest of those who launched that missile”.
And those who give them succour.
Anthony Harwood is a former foreign editor of the Daily Mail.
Follow him on Twitter: @anthonyjharwood
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