After Saudi Arabia and members of the Organization of the Petroleum Exporting Countries (OPEC) surprised the world by announcing oil production cuts, a spokesperson for US President Biden’s National Security Council said that it was not advisable to reduce production. According to a recent report, Saudi Crown Prince Mohammed bin Salman told his associates that Riyadh was no longer interested in pleasing the United States.
The growing abandonment of US dollar hegemony in global trade and finance
There has been a lot of focus on OPEC members and BRICS countries (Brazil, Russia, India, China and South Africa) recently, as several members of these groups are switching alliances. On Sunday April 2, several major oil producers, including Saudi Arabia, Russia, the United Arab Emirates (UAE), Iraq, Kuwait, Oman and Algeria, announced their intention to cut production of oil in 2023. The cuts will begin in May, and production is estimated to be reduced by 1.15 million barrels of oil per day.
After the decision, the White House replied on the news stating that it was not advisable to cut oil production. Despite statements from the Biden administration and various Democratic policymakers promising consequences the last time major oil producers cut production in October 2022, Saudi leaders don’t seem to care. According to a Wall Street Journal (WSJ) report published on April 3, Prince Mohammed “told his associates late last year that he was no longer interested in pleasing the (United States).”
According to a report by Summer Said and Stephen Kalin in the WSJ, “people familiar with the conversation” explained that the prince wants “something in return for everything he gives to Washington.” The report also claims that the oil production cut “has major political ramifications and could add to Riyadh’s already significant tensions with Washington.” Last October, Saudi government officials reportedly mocked President Joe Biden for his mental acumen. In July, Biden flew to Saudi Arabia to meet the prince and pressed the Saudis to increase oil production.
However, the Saudi government refused his demands, and after Biden left, the US president was ridiculed on a TV show broadcast in Saudi Arabia, calling it “Sleepy Joe”. At that time, people familiar with the subject said the WSJ that anonymous members of the Saudi government say the prince and his team are privately mocking President Biden behind his back. Biden was also mocked when he traveled to see the prince and decided not to shake hands with the prince, instead offering a pandemic-inspired punch.
Amid the Saudi government’s message and America’s tensions with BRICS countries, the US government’s exceptionalism that inspired the 2004 comedy “Team America: World Police” seems to be fading faster than ever. This year, after a 48-year relationship solely with the US dollar, Mohammed Al-Jadaan, Saudi finance minister, said the kingdom was open to trade in currencies other than the US dollar.
Many analysts and economists have pointed out that the US dollar has been supported by the petrodollar regime since 1944. Recent events in 2023 indicate that the greenback’s superiority is taking a back seat, and many overseas officials don’t seem to mind. worry about what the United States thinks these days.
What do you think will be the long-term implications of these tensions between the United States and Saudi Arabia on the world oil market and the international relations between these two countries? Share your thoughts on this topic in the comments section below.
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