Russia’s invasion of Ukraine has had a considerable impact on oil and gas prices. Russia is the main gas supplier to Europe that passes through Ukraine, and it is a member of OPEC+, a consortium of oil-producing countries.
Before the invasion, the US had been working to ease the pressure on energy prices in the country, which have now climbed to over $100 per barrel. The US sent officials to Saudi Arabia to ask the Kingdom to increase its oil production as fears grew of a Russian invasion of Ukraine, which would lead to hikes in energy prices.
The Saudi government commits to OPEC+ members, and any changes in production must go through the member states for approval. Amid Russia’s invasion of Ukraine, the world is trying to stabilize crude oil and gas prices. Saudi Arabia and OPEC+ are some of the solutions to ease rising energy prices by ensuring the stability of global supplies.
When Russia invaded Afghanistan in December 1979, Saudi Arabia supported the West by increasing oil production, but the Kingdom paid a high price. In the 1980s, oil went from $30 per barrel to $7, and Saudi national debt accumulated to over 100 percent of the country’s gross domestic product.
In 2014, the Kingdom helped reduce the crude oil price, which went from $150 per barrel to $30. In 2018, then-US President Donald Trump called on Saudi Arabia to increase oil production to ease prices.
Saudi Arabia has received unbalanced treatment for decades despite providing support to other countries. Currently, Western leaders and the international media are trying to pressure the Kingdom to increase its oil production to reduce the impact of the military operation in Ukraine on the price of oil.
Dr. Turki Faisal Al-Rasheed
In return, the US Congress unanimously voted for the Justice Against Sponsors of Terror Act, which authorizes federal courts to exercise subject matter jurisdiction over any foreign state’s support for acts of international terrorism against a US national or property, regardless of whether that state is designated as a sponsor of terrorism.
Additionally, Congress passed the No Oil Producing and Exporting Cartels Act, which was designed to remove state immunity and allow the Organization of the Petroleum Exporting Countries and its member states’ national oil companies to be sued under US antitrust law for anti-competitive attempts to limit the world’s supply of petroleum and the consequent impact on oil prices.
In short, Saudi Arabia has received unbalanced treatment for decades despite providing support to other countries. Currently, Western leaders and the international media are trying to pressure the Kingdom to increase its oil production to reduce the impact of the military operation in Ukraine on the price of oil.
The consequences of an increase in oil production are that Saudi Arabia will not fulfill its commitment to other OPEC+ members to achieve stable oil prices in the international market in the long term, and it will jeopardize the Kingdom’s economy and implementation of its Vision 2030 plan.
As I always say, the Saudi-US relationship should be our top choice, but not the only choice.
• Dr. Turki Faisal Al-Rasheed is an adjunct professor at the University of Arizona. He is the author of several books, including most recently “Public Governance and Strategic Management Capabilities: Public Governance in the Gulf States.” He is currently finalizing “Saudi Arabia’s Transformation: Uncertainty and Sustainability,” which is due for publication in late 2022 by Routledge and UCLA.