After Saudi Arabia and OPEC members stunned the world by announcing oil production cuts, a spokesman for US President Biden’s National Security Council has said that cutting production is not a good idea. According to recent reports, Saudi Crown Prince Mohammed bin Salman has told his peers that Riyadh is no longer interested in pleasing the United States.
break from U.S. dollar hegemony in global trade and finance
Attention has been focused recently as several OPEC members and BRICS countries (Brazil, Russia, India, China, and South Africa) have shifted alliances: on Sunday, April 2, Saudi Arabia, Russia, the United Arab Emirates (UAE), Iraq, Kuwait, and Oman, Several major oil-producing countries, including Algeria, announced plans to cut oil production in 2023. The cuts are estimated to begin in May and will reduce production by 1.15 million barrels per day.
After the decision, the White House respondedto the news, saying that oil production cuts were undesirable. Despite statements from the Biden administration and various Democratic policymakers vowing to finally deliver results when major oil producers cut production in October 2022, Saudi Arabia’s leaders do not seem to care, according to an April 3 Wall Street Journal (WSJ)reportsthat Prince Mohammed “told his associates late last year that he was no longer interested in pleasing [the United States].”
The WSJ’s Summer Said and Stephen Kalin report
that “people familiar with the conversation” explain that the prince “wants something in return for what he gives to Washington.” The report also argues that oil production cuts “could have major political consequences and spur Riyadh’s already significant tensions with Washington.” Last October, Saudi officials reportedly mocked President Joe Biden over his mental acuity; in July, Biden flew to Saudi Arabia to meet with the prince and press the Saudis to increase oil production.
{But the Saudi government refused his request, and after Biden left, he mocked the U.S. president, calling him “Sleepy Joe” in atelevision broadcastthat aired in Saudi Arabia. At the time, peoplefamiliar with the matter told the WSJ that unnamed members of the Saudi government said the prince and his team were personally making fun of Biden behind his back. Biden was also mocked when he chose not to shake the prince’s hand when he went to meet him and instead offered apandemic-inspired fist bump.
Amid the Saudi government’s message and the U.S. tension with the BRICS nations, there is the U.S. government exceptionalism that inspired the 2004 comedy “Team America: World Police” that seems to be fading faster than ever. This year, Saudi Finance Minister Mohammed al-Jadaan, who has dealt exclusively with the U.S. dollar for 48 years, said the kingdom is open to trading in currencies other than the U.S. dollar.
Many analysts and economists have stressed that the U.S. dollar has been propped up by the petrodollar system since 1944; recent events in 2023 show that the greenback’s dominance has taken a back seat, and many foreign officials have recently been wondering what the United States seems not to care what they think.
How do you think these tensions between the U.S. and Saudi Arabia will affect the global oil market and international relations between the two countries in the long term? Share your thoughts on this subject in the comments section below.
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