Abu Dhabi, United Arab Emirates –
Saudi Arabia and the United Arab Emirates on Monday defended a decision by OPEC and its allies to cut oil production, even as a US envoy warned of “economic uncertainty” ahead for the world.
Though cordial, feedback from the Abu Dhabi International Petroleum Expo and Conference showed the stark divide between the United States and the Arab Gulf countries it supports militarily in the wider Middle East. Already, US politicians have threatened to strike arms deals with the kingdom and described it as siding with Russian President Vladimir Putin amid his war on Ukraine.
Saudi Energy Minister Prince Abdulaziz bin Salman alluded to this in brief remarks at the event.
“We owe it to no one but ourselves,” the prince said to applause, noting that upcoming UN climate change summits will be held in Egypt and the United Arab Emirates. “It was done for us, by us, for our future, and we have to commit to it.”
Emirati Energy Minister Suhail al-Mazrouei echoed this defence. While saying OPEC and its allies are “just a phone call away if the requirements are there” to boost production, he made no suggestion such a boost would be on the way anytime soon. .
“I can assure you that we in the UAE, together with our colleagues in OPEC+, are committed to providing the world with what it needs,” al-Mazrouei said. “But at the same time, we are not the only producers in the world.”
OPEC and a loose confederation of other countries led by Russia agreed in early October to cut production by 2 million barrels of oil per day, starting in November.
OPEC, led by Saudi Arabia, insisted its decision stemmed from concerns about the global economy. Analysts in the United States and Europe warn that a recession threatens the West due to inflation and related interest rate hikes, as well as Russia’s war-affected food and oil supplies. against Ukraine.
“The global economy is on a knife edge,” said Sultan Ahmed Al Jaber, chief executive of state-owned Abu Dhabi National Oil Co.
Natural gas was also affected. by the war, sending energy bills skyrocketing across Europe.
“We have to realize that a lot of people… are facing a very difficult winter in the UK, Europe and around the world,” BP CEO Bernard Looney said at the event. Abu Dhabi. “And we have to understand that it’s a very difficult place for them.”
U.S. politicians, meanwhile, reacted angrily to a move that could keep gasoline prices high. An average gallon of regular gasoline in the United States now costs $3.76 – down from June’s record high of $5 a gallon, but still high enough to bite into consumers’ wallets. Benchmark Brent crude settled at $95 a barrel on Monday.
“I think at the end of the day, we face economic uncertainty on a global scale,” said Amos Hochstein, the US envoy for energy affairs. “Energy prices need to be set in a way that allows for economic growth. And if they are not … they will go too high and accelerate an economic downturn, which ultimately will be the only thing that will be terrible for the energy demand itself.”
Hochstein declined to speak to The Associated Press after appearing on stage at the Abu Dhabi conference.
President Joe Biden, who visited Saudi Arabia in July and punched Crown Prince Mohammad bin Salman before a meeting, recently warned the kingdom that “there will be consequences for what they did”.
Saudi Arabia has hit back, publicly saying the Biden administration is seeking to delay OPEC cuts by a month, which could help reduce the risk of a spike in gasoline prices ahead of the US election. mid-term of November 8.
The back and forth between Riyadh and Washington shows how strained relations have remained between the two countries since the horrific 2018 killing of Washington Post columnist Jamal Khashoggi by Saudi security forces. US intelligence agencies believe the murder was carried out on the orders of Prince Mohammed.
The Soufan Center, a New York-based think tank, said on Monday it appeared “trust and mutual respect between the United States and Saudi Arabia appear to have reached a nadir” amid the dispute.
“The U.S.-Saudi relationship could fundamentally evolve into an almost purely transactional relationship, characterized by ‘strategic drift’, as Riyadh continues to act against its own self-interest, a decision born out of grudge, not strategy,” he said. said the center.
“If Saudi Arabia again votes to cut production, it will lead to another break with the United States and signal Riyadh’s growing drift towards Moscow,” he added.
Meanwhile, the global thirst for oil will only increase. An OPEC outlook released on Monday estimates that by 2045, global oil demand will reach 101 million barrels per day, up from 88 million barrels per day in 2021.
Oil will remain the world’s number one source of energy even with growing concerns about global climate change, OPEC said.
“The global reality, as we know, is that there is a huge investment gap to meet this expected future growth in demand,” OPEC Secretary General Haitham Al Ghais said. “The sustainability of the global energy system is actually at stake.”