Page 8 - MEOG Week 45 2022

MEOG POLICY & SECURITY MEOG

US mulls its options after

Saudi oil production cuts

SAUDI ARABIA DESPITE its furious reaction to Saudi Arabia’s In the days that followed the cuts the Saudis
decision last month to cut oil production in the publicly countered that the administration had
face of global shortages, and threats of retali- asked for the cuts to be delayed by a month,
ation, the Biden administration is looking for indirectly suggesting that Biden wanted to
signs that the tight, decades-long security rela- avoid increased prices at the gas pump before
tionship between Washington and Riyadh can the upcoming US midterm elections. National
be salvaged. Security Council spokesman John Kirby advised
Those ties, and a commitment to help protect reporters that the Saudis were trying to “spin” the
its strategic partners – particularly against Iran – US concerns over Ukraine and world energy sta-
are an integral part of US defences in the Middle bility into a domestic political ploy, and to deflect
East. When recent intelligence reports warned criticism of fence-sitting on Russia’s war.
of imminent Iranian ballistic missile and drone Many lawmakers, some of whom have long
attacks on targets in Saudi Arabia, the US Central advocated cutting ties with the Saudis, took even
Command launched warplanes based in the Per- greater umbrage, calling for the immediate with-
sian Gulf region towards Iran as part of an overall drawal of thousands of US troops stationed in
elevated alert status of US and Saudi forces. The the kingdom and a stop to all arms sales, among
scrambling of the jets, dispatched as an armed other punitive measures.
show of force and not previously reported, was But the White House has become uneasy over
the latest illustration of the strength and impor- the reaction its sharp response has provoked at
tance of a partnership the administration has home. Rather than moving quickly to respond,
said it is now re-evaluating. it is playing for time, looking for ways to bring
“There’s going to be some consequences for the Saudis back into line while preserving strong
what they’ve done,” President Biden said after bilateral security ties.
the Saudis agreed last month, at a meeting of the “Are we rupturing the relationship? No,” said
OPEC Plus energy cartel they chair, to cut pro- a senior administration official, speaking on the
duction by 2mn barrels per day (bpd). condition of anonymity about what has become
According to the White House, the cuts serve a sensitive political and diplomatic situation.
only to increase prices, and would benefit car- “We had a fundamental disagreement on the
tel member Russia at precisely the moment the state of the oil market and the global economy,
United States and its allies were trying to choke and we are reviewing what transpired. But we
off Moscow’s oil revenue to undercut its war in have important interests at stake in this relation-
Ukraine. ship,” the official said.™

US targets Iran, Hezbollah

oil smuggling networks

IRAN THE US has targeted members of an alleged oil the process aimed at restoring the 2015 nuclear
smuggling network working for the extra-terri- deal, or JCPOA. However, with that process
torial Al-Quds force of Iran’s Islamic Revolution- derailed and Iran angering Washington with its
ary Guard Corps (IRGC) and Shi’ite Lebanese often brutal crackdown on anti-regime protest-
group Hezbollah. ers and apparent provision of strike drones to
In a statement, the Office of Foreign Assets Russian forces fighting in Ukraine, OFAC offi-
Control (OFAC), part of the US Treasury cials appear to have renewed attempts at target-
Department, said it has designated members ing Iranian grey market revenue flows.
of the network that facilitated oil trading for “Market participants should be vigilant of
Al-Quds and Hezbollah. Hizballah and the IRGCQF’s attempts to gener-
In the year leading up to the summer, the ate revenue from oil smuggling to enable their
US was unusually lax in the pursuit of sanctions terrorist activities around the world,” said Brian
enforcement against the Iranian regime’s crude Nelson, the US Treasury’s Under Secretary
oil exports. Analysts saw this approach as part for Terrorism and Financial Intelligence in a
of an attempt to encourage Tehran to play ball in statement.™

P8 www. NEWSBASE .com Week 45 09•November•2022