After Saudi Arabia and members of the Organization of the Petroleum Exporting Countries (OPEC) shocked the world by announcing cuts in oil production, a spokesman for US President Biden’s National Security Council said cutting production is not recommended. According to a recent report, Saudi Crown Prince Mohammed bin Salman has told his associates that Riyadh is no longer interested in pleasing the United States.
The growing shift away from the hegemony of the US dollar in world trade and finance
Recently, much attention has been paid to members of OPEC and the BRICS countries (Brazil, Russia, India, China and South Africa), as several members of these groups are changing alliances. On Sunday, April 2, several major oil producers, including Saudi Arabia, Russia, the United Arab Emirates (UAE), Iraq, Kuwait, Oman, and Algeria, announced plans to cut oil production by 2023. Cuts will begin in May. and it is estimated that production will be reduced by 1.15 million barrels of oil per day.
Following the decision, the White House answered to the news stating that it was not advisable to cut oil production. Despite statements by the Biden administration and several Democratic lawmakers promising consequences the last time major oil producers cut production in October 2022, Saudi Arabia’s leaders don’t seem to care. According to a Wall Street Journal (WSJ) report Posted 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 exchange for whatever he gives to Washington.” The report also claims that the cut in oil production “has major political ramifications and could escalate Riyadh’s already significant tensions with Washington.” Last October, Saudi government officials allegedly mocked President Joe Biden for his sharp mind. In July, Biden flew to Saudi Arabia to meet the prince and pressured the Saudis to produce more oil.
However, the Saudi government refused their requests, and after Biden left, the US president was ridiculed in a television broadcast went on the air in Saudi Arabia, calling it “Sleepy Joe”. At the time, people familiar with the matter 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 teased when he traveled to see the prince and decided not to shake the prince’s hand, but to offer him a pandemic inspired fist bump.
Amid the Saudi government’s messaging and US tensions with the BRICS nations, the US government 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 Arabia’s finance minister, said the kingdom is open to trade in currencies other than the US dollar.
Many analysts and economists have stressed that the US dollar has been supported by the petrodollar scheme since 1944. Recent events in 2023 indicate that the dollar’s superiority is receding into the background, and many officials abroad don’t seem to care what that the US thinks these days.
What do you think will be the long-term implications of these tensions between the US and Saudi Arabia on the world oil market and international relations between these two countries? Share your thoughts on this topic in the comments section below.
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