Biden threatens ‘consequences’ for Saudi Arabia after OPEC cut, but his options are limited
US President Joe Biden and Saudi Crown Prince Mohammed bin Salman arrive for the family photo during the Jeddah Security and Development Summit (GCC+3) at a hotel in Saudi Arabia’s Red Sea coastal city of Jeddah on July 16, 2022.
Mandel Ngan | Afp | Getty Images
President Joe Biden is angry at Saudi Arabia for its decision to slash oil production along with its OPEC allies against U.S. wishes, and he’s made no secret of it.
With the global economy on a knife-edge and energy prices high, Washington sees the kingdom’s move – which it made in coordination with Russia and other oil-producing states – as a snub and a blatant display of siding with Moscow.
The oil producer group in early October announced its largest supply cut since 2020, to the tune of 2 million barrels per day from November, which its members say is designed to spur a recovery in crude prices to counter a potential fall in demand.
For this, Biden said in an interview with CNN on Tuesday that there would be “consequences.” He did not go into further detail as to what those consequences might be.
But what are the Biden administration’s options, and could they backfire?
Weapons and anti-trust laws
The Saudi-U.S. relationship was founded, broadly speaking, on the principle of energy for security. Washington has since the 1940s provided billions of dollars in military and security aid to Saudi Arabia. But in recent years, and particularly since the Obama administration began making diplomatic inroads with Iran, Riyadh feels that the U.S. commitment to its security has waned.
“The truth is, neither side has been holding up their end of the bargain for nearly 10 years now,” Michael Stephens, an associate fellow at the Royal United Services Institute in London, told CNBC.
“And what you’re seeing, I think, are permanent fractures in the relationship that are based on the fact that neither side really sees as much strategic benefit in the other as they did 20 years ago,” Stephens said, adding that Saudi Arabia’s OPEC oil production cut “is a reflection of that.”
The potential “consequences” Washington can put into action include cutting its military support to the Saudi kingdom, and going after OPEC with U.S. laws.
A file photo of cannisters containing Patriot missiles to intercept missiles fired at Saudi Arabia or its neighboring countries.
Greg Mathieson | Mai | The LIFE Images Collection | Getty Images
Indeed, just one day before Biden’s comments, Sen. Bob Menendez, D-N.J., chairman of the Senate Foreign Relations Committee, demanded that the U.S. immediately halt all cooperation with Saudi Arabia — including weapons sales.
“The United States must immediately freeze all aspects of our cooperation with Saudi Arabia, including any arms sales and security cooperation beyond what is absolutely necessary to defend U.S. personnel and interests,” Menendez said in a statement.
In an earlier interview with CNBC, Sen. Chris Murphy, D-Conn, asked, “What’s the point of looking the other way when the Saudis chop up journalists and repress political speech inside Saudi Arabia if when the chips are down, the Saudis effectively choose the Russians over the U.S.?”
Even Sen. Bernie Sanders, I-Vt., weighed in, demanding in a tweet that, “If Saudi Arabia, one of the worst violators of human rights in the world, wants to partner with Russia to jack up US gas prices, it can get Putin to defend its monarchy. We must pull all US troops out of Saudi Arabia, stop selling them weapons & end its price-fixing oil cartel.”
Beyond withholding military aid, there are legal channels the U.S. government can pursue.
One is the NOPEC bill, which stands for No Oil Producing and Exporting Cartels. This would classify OPEC as a cartel and subject its members to anti-trust legislation.
Something long discussed by lawmakers, the bill is designed to protect U.S. consumers and businesses from artificial oil spikes.
It passed a Senate committee in early May and hasn’t yet been signed into law, but could expose OPEC countries and partners to lawsuits for coordinating supply cuts that raise global crude prices.
The bill would still need to be passed by the full Senate and House and signed into law by the president to go into effect. OPEC ministers have previously criticized the NOPEC bill, warning it would bring greater chaos to energy markets.
Consequences for the U.S. – and for crude prices
The decision by OPEC+ – which constitutes OPEC and its non-OPEC allies like Russia – to cut its output “underscores the extent to which the Biden administration has lost its ability to influence Saudi OPEC+ policy,” said Torbjorn Soltvedt, principal MENA analyst at risk intelligence firm Verisk Maplecroft.
“The White House has few good options despite Biden’s warning of ‘consequences’ after the cut,” he said, noting U.S. lawmakers’ threats of anti-trust legislation and removal of U.S. military assets from Saudi Arabia.
While both courses of action would send a clear message, this could backfire for both the U.S. and for crude prices.
“Both of these options would threaten to break already fraught relations, which in turn would put even greater upward pressure on oil and fuel prices,” Soltvedt said.
“In short, a breakdown in U.S.-Saudi relations would mean a higher Middle East risk premium for the global oil market and higher oil and fuel prices,” he explained. “This is the opposite of what the White House is trying to achieve ahead of midterm elections in November.”
It’s also key to note that the 2 million barrel per day cut will not in fact be as big as that headline figure; several member states have already been far short of their individual production ceilings, and Iraq for instance has indicated it will be producing more than its assigned quota.
Still, many American politicians have long been out of patience with the nature of the U.S.-Saudi relationship, especially as U.S. imports of Saudi oil have shrunk over the years and more than 80% of the Middle East’s crude exports now go to Asia.
This has made a growing number of U.S. lawmakers question, Soltvedt said, “why the American navy should underwrite the security of Middle Eastern oil exports when those barrels are increasingly going East rather than West.”
— CNBC’s Sam Meredith contributed to this report.
Global renewable developer and energy giant RWE has halted its US offshore wind operations “for the time being” because of the “political environment” the Trump administration has created.
RWE, Germany’s biggest electricity producer, said in March that it had dialed back its US offshore wind activities. But now, CEO Marcus Krebber said in a speech transcript, which he’ll deliver at the company’s Annual General Meeting in Essen on April 30, that its US offshore wind business is now closed (but it wasn’t all bad news):
In the US, where we have stopped our offshore activities for the time being, our business in onshore wind, solar energy, and battery storage has so far been developing very dynamically. At the start of this year, we reached an important milestone when our US generation capacity hit the 10 gigawatt mark. The construction of a further 4 gigawatts is secured.
He went on to say that renewables have created regional value and jobs, but that the company remains “cautious given the political developments.” RWE has introduced more stringent requirements for future US investments:
All necessary federal permits must be in place. Tax credits must be safe harbored and all relevant tariff risks mitigated. In addition, onshore wind and solar projects must have secured offtake at the time of the investment decision. Only if these conditions are met will further investments be possible, given the political environment.
About half of RWE’s installed renewable capacity is in the US, where it’s the third-largest renewable energy company through its subsidiary, RWE Clean Energy. RWE holds the rights to develop US offshore wind projects in New York, Louisiana, and California.
RWE paid $1.1 billion for the New York lease area in 2022, where it’s meant to develop the 3 gigawatt (GW) Community Offshore Wind with the UK’s National Grid. Community Offshore Wind was projected to come online in the early 2030s and expected to power more than a million homes.
The developer paid $5.6 billion for the Louisiana lease in the Gulf of Mexico in 2023 as the lone bidder for development rights, and the Canopy Offshore Wind project off Northern California was not expected to be completed for another decade.
Read more: Trump admin halts $5 billion NY offshore wind project mid-build
Now is a great time to begin your solar journey so your system is installed in time for those longer sunny days. If you want to make sure you find a trusted, reliable solar installer near you that offers competitive pricing, check out EnergySage, a free service that makes it easy for you to go solar. They have hundreds of pre-vetted solar installers competing for your business, ensuring you get high-quality solutions and save 20 to 30% compared to going it alone. Plus, it’s free to use and you won’t get sales calls until you select an installer and share your phone number with them.
Your personalized solar quotes are easy to compare online and you’ll get access to unbiased Energy Advisors to help you every step of the way. Get started here. –trusted affiliate partner
FTC: We use income earning auto affiliate links. More.
It’s that time of year again, time for events across the country to show off electric vehicles at Drive Electric Earth Month.
Drive Electric Earth Month is an offshoot of Drive Electric Week, a long-running annual tradition hosting meetups mostly in the US, but also occasionally in other countries. It started as Drive Electric Earth Day, but since not every event can happen on the same day, they went ahead and extended it to encompass “Earth Month” events that happen across the month of April. It’s all organized by Plug In America, the Sierra Club, the Electric Vehicle Association, EV Hybrid Noire, and Drive Electric USA.
Events consist of general Earth Day-style community celebrations, EV Ride & Drives where you can test drive several EVs in one place, and opportunities to talk to EV owners and ask them questions about what it’s like to live with an EV, away from the pressure of a dealership.
This month, there are 158 events registered across the US and 1 in Mexico (including one online webinar about things to consider when purchasing an EV).
Events have been happening all month, but the biggest weekend is this upcoming one, APril 26-27.
One really neat event was the Asheville event, which showcased the resiliency of EVs in an area devastated by Hurricane Helene, which was made more severe by climate change. That event was attended by the Rivian R1T which famously got dragged 100 feet submerged in mud and came out running fine.
But the bulk of the events happened on the weekends surrounding Earth Day, April 22, so there were several last weekend and will be even more this upcoming weekend.
There are plenty of events in the big cities where you’d expect, but Plug In America wanted to highlight a few of the events in smaller places around the country. Here’s a sampling of upcoming events:
- Big Island EV – Cruise and Picnic in Waimea, HI on April 26, 10am-1pm – EV drivers will congregate in various places around the Big Island (Kona, Waimea, Waikoloa and Hilo), then drive up Saddle Road to the Gil Kahele Recreation Area on Mauna Kea for a potluck and a chance to talk about the experience of owning EVs on the Big Island.
- Santa Barbara Earth Day 2025 and Green Car Show in Santa Barbara, CA on April 26-27, 11am-8pm – This is part of Santa Barbara’s Earth Day celebration, which routinely attracts 30,000 participants and is one of the longest-running Earth Day celebrations on the planet. The Green Car Show includes ride & drives and an “Owners Corner” where owners can showcase their EVs and attendees can check them out and ask questions.
- Earth Day’25 – EV’s role in a sustainable future in Queretaro City, Mexico on April 26, 9am-4pm – The sole Mexican event, this is a combined in-person/online seminar at the Querétaro Institute of Technology.
- Norman Earth Day Festival in Norman, OK on April 27, 12-5pm – Another municipal Earth Day festival, with hands-on activities for kids to learn about the environment. A portion of the parking lot reserved for an EV car show for EV owners who pre-register to show off their vehicles.
- Oregon Electric Vehicle Association Test Drive & Information Expo in Portland, OR on April 27, 10am-4pm – This one is at Daimler Truck’s North American HQ, and will have several EVs for test drives, owner displays (including DIY gas-to-EV conversions), and keynote presentations by EV experts. They’ll even have a 1914 Detroit Electric EV available for test rides!
- And, we at Electrek want to give a shoutout to Rove’s EV Drive Days in Santa Ana 10am-3pm April 28 – ROVE is the company behind the “full-service” EV charging concept that we’ve talked about several times here on Electrek, and we like what they’re doing for EV charging. They’ve hosted a few community events, and this is their contribution to Earth Month.
Each event has a different assortment of activities (e.g. test drives won’t be available at every event, generally just the larger ones attended by local dealerships), so be sure to check the events page to see what the plan is for your local event.
These events have offered a great way to connect with owners and see the newest electric vehicle tech, and even get a chance to do test rides and drives in person. Attendees got to hear unfiltered information from actual owners about the benefits and trials of owning EVs, allowing for longer and more genuine (and often more knowledgeable) conversations than one might normally encounter at a dealership.
And if you’re an owner – you can show off your car and answer those questions for interested onlookers.
To view all the events and see what’s happening in your area, you can check out the list of events or the events map. You can also sign up to volunteer at your local events, and if you plan to show off your electric car, you can RSVP on each event page and list the vehicle that you plan to show (or see what other vehicles have already registered).
Charge your electric vehicle at home using rooftop solar panels. Find a reliable and competitively priced solar installer near you on EnergySage, for free. They have pre-vetted installers competing for your business, ensuring high-quality solutions and 20-30% savings. It’s free, with no sales calls until you choose an installer. Compare personalized solar quotes online and receive guidance from unbiased Energy Advisers. Get started here. – ad*
FTC: We use income earning auto affiliate links. More.
-
Sports3 years ago‘Storybook stuff’: Inside the night Bryce Harper sent the Phillies to the World Series
-
Sports1 year agoStory injured on diving stop, exits Red Sox game
-
Sports1 year agoGame 1 of WS least-watched in recorded history
-
Sports2 years agoMLB Rank 2023: Ranking baseball’s top 100 players
-
Sports4 years ago
Team Europe easily wins 4th straight Laver Cup
-
Environment2 years agoJapan and South Korea have a lot at stake in a free and open South China Sea
-
Environment2 years agoGame-changing Lectric XPedition launched as affordable electric cargo bike
-
Business3 years agoBank of England’s extraordinary response to government policy is almost unthinkable | Ed Conway