Biden’s Secret Oil Deal That Went South 

President Biden’s top advisers believed they had reached a secret agreement to increase oil production through the end of the year during his politically risky trip to Saudi Arabia this summer. Despite a campaign pledge to avoid the kingdom and its crown prince, the deal could have justified breaking the pledge.

It did not turn out as planned. Biden proceeded with the trip. The Democratic Party continues struggle with inflation and high gas prices ahead of the November elections; Saudi Arabia and Russia led a group of oil-producing nations to reduce the total oil production by 2 million barrels a day earlier this month, the opposite of what they thought they would get.

The move outraged Biden administration officials to reevaluate America’s relationship with the monarchy and sparked an exchange of accusations, including the White House’s allegation that Saudi Arabia was assisting Russia in its conflict against Ukraine.

Crown Prince Mohammed bin Salman deceived the administration, infuriating lawmakers who received classified briefings and other conversations that included oil deal details about the trip’s benefits. None of which had been previously disclosed and was expected to increase production between September and December.

This report is based on conversations with American and Gulf Arab officials and Middle East analysts familiar with negotiations between the two governments. The events of the past six months are a tale of handshake deals, wishful thinking, missed cues, and finger-pointing over unfulfilled promises. After the murder of writer Jamal Khashoggi, the consequence has been another low moment in America’s troubled relations with Saudi Arabia, far from repairing a relationship with a leader that President Biden once swore to regard as a “pariah.”

Under the leadership of its ambitious and frequently ruthless crown prince, Saudi Arabia appears eager to shed some of its longstanding reliance on the United States, with Crown Prince Mohammed attempting to establish Saudi Arabia as an independent superpower.

Even days before the OPEC+ decision, American officials obtained assurances from the crown prince that there would be no production restrictions. Upon learning of the Saudi U-turn, they launched a failed effort to sway the views of the royal court. The Saudi Energy Ministry issued a statement stating the kingdom rejects these charges and emphasizes that these mischaracterizations by unnamed sources are completely incorrect.

The ministry stated the decisions of OPEC Plus are based exclusively on market fundamentals and not on politics.

White House officials concede they were outraged and shocked by what they described as a U-turn by Saudi Arabia but claim their broader effort to reduce energy costs is successful.

At the same time, U.S. officials are preparing for a potential price spike in December if a European ban on Russian oil goes into place and the Saudis refuse to expand oil output to compensate for the predicted supply shortfall. According to the authorities, this would be conclusive evidence that the Saudis are aiding the Russians by undermining the strategy headed by the United States and Europe.

Biden’s energy envoy, Amos Hochstein, stated while we disagreed with the OPEC Plus decision in early October, we realize the need to continue to engage and communicate with Saudi Arabia and other producers to guarantee a stable and fair global oil market.

Even some of the President’s most ardent supporters have described the incident as the administration abandoning values for political pragmatism with little to show for it.

Rep. Gerald E. Connolly, D-Virginia, a member of the House Foreign Affairs Committee, stated there is now a degree of humiliation as the Saudis go on their path.

Biden administration officials began arranging in the spring for the President to make a summit trip in Saudi Arabia while simultaneously visiting Israel over the summer. They were aware that such a tour would draw criticism.

However, some of the President’s advisors saw short-term and long-term positives from the trip and attempted to mend the relationship secretly. They stated that it was crucial to collaborate with the monarchy on the Yemen conflict and Iran and to increase Israel’s regional recognition. They anticipated the trip would strengthen Saudi Arabia’s resolve to persuade OPEC to raise oil output, as Russia’s war in Ukraine had contributed to soaring global gasoline costs.

Leading proponents of the visit, including Hochstein and Brett McGurk, the chief officer for Middle East affairs at the National Security Council, met with Crown Prince Mohammed and his advisors in the spring. American officials reportedly signed a two-part secret oil agreement with the Saudis in May.

First, the Saudis would expedite a planned September production increase of 400 thousand barrels per day by OPEC+, pushing it to July and August. The Saudis would then convince the cartel to declare a further boost in the production of 200,000 barrels per day every month from September to December this year.

OPEC+ declared on June 2 that they would forward the production rise originally set for September, completing the secret agreement’s first part.

The White House announced Biden’s upcoming travel to Saudi Arabia on the same day.

The price of oil was progressively declining when Biden arrived in Jeddah, Saudi Arabia, on July 15 for his meeting with Crown Prince Mohammed and other Arab officials. Behind the scenes, White House officials thought they had at least strengthened Saudi pledges on several fronts, despite the image of the American President pumping hands with the Saudi crown prince he once reviled.

During the conference, Saudi officials provided members of Biden’s team with a graph indicating that oil prices had fallen to $101 per barrel, down from more than $121 per barrel since the outbreak of the Ukraine conflict.

The Americans believed that the accord was on track and that Crown Prince Mohammed was satisfied after the conference. In Riyadh, however, senior Saudi officials were quietly informing others that they had no plans for future significant increases in oil output.

Prince Abdulaziz, the energy minister, argued at a high-level conference on September 27 that cutbacks were necessary to prevent prices from dropping. American officials think that this meeting had a significant impact on Crown Prince Mohammed. According to U.S. officials, Prince Abdulaziz has stated that the Saudi government lacks the means to support economic diversification initiatives, which are central to Prince Mohammed’s domestic agenda.

Some U.S. officials think the Russians influenced the Saudi U-turn, citing Prince Abdulaziz’s close working relationships with Putin-aligned Russian officials. Saudi authorities fiercely denied marching in lockstep with Russia and stated they had considered themselves a neutral mediator in the conflict between Russia and Ukraine. On December 4, when OPEC+ is slated to meet again, it will become clear whether Riyadh has thrown its lot with Moscow, according to some American officials.