President Joe Biden has reportedly said there would be “consequences” for Saudi Arabia for collaborating with Russia to trim oil production, an indication that cracks have appeared in the relationship between the two long-time allies.
What Happened: Biden told CNN’s Jake Tapper in an interview broadcast in October that “there’s going to be some consequences for what they’ve done with Russia,” reported Reuters.
Policy Review: As anger boiled over the decision of the Organization of the Petroleum Exporting Countries and its allies, including Russia, known as the OPEC+, Biden’s staff announced he would re-evaluate the entire relationship with Saudi Arabia.
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Oil prices shot up after the announcement, paring some early losses, with some ETFs also gaining in the process. The United States Brent Oil Fund BNO has gained over 1% in the last five days, while the Vanguard Energy Index Fund ETF VDE has traded flat in the same period.
White House press secretary Karine Jean-Pierre said a policy review would be conducted but did not provide any further details, the report said.
Going against the Biden administration's push, OPEC+ last week announced an output cut of 2 million barrels per day.
Security Threat: John Kirby, the White House national security spokesperson, said Biden would work with Congress "to think through what that relationship ought to look like going forward."
Most U.S. arms sales to Saudi Arabia are done keeping certain regional threat in mind. "Certainly, we won't take our eye off the threat that Iran poses not only to the region but in some ways beyond," Price said.
This story was originally published on Oct. 12, 2022.
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