The Autocrat Cartel to the Rescue
By causing oil prices to rise again, Saudi Arabia and OPEC are helping Russia fund its war in Ukraine and promoting the Republican takeover of the US Congress.
Things hadn’t been going so well for the autocrats for some time. In Ukraine, Vladimir Putin has hit a wall in the face of fierce Ukrainian resistance and arms supplied by their democratic allies. In the United States, the marked drop in the price of gasoline at the pump since the summer gave hope to the Democrats in view of the legislative elections of November 8.
Last week, the decision by Saudi Arabia and its OPEC allies to cut two million barrels of their daily oil production was a game-changer. While signs of recession are appearing in several countries, it is not impossible that economic reasons could explain this slowdown in oil production, but the immediate political reasons seem even more important.
A gift for Putin
Accumulating setbacks in Ukraine, Vladimir Putin could not have hoped for better than a sudden rebound in oil prices to finance a conflict that had become ruinous for his country.
Above all, the increase in the price of hydrocarbons on the eve of a winter that promises to be cold will test political support for Ukraine in Western Europe. The extreme right open to rapprochement with Putin’s Russia is not doing too badly in Europe, and this kind of situation can only be favorable to it.
Hard blow for Biden and the Democrats
In the United States, it’s an open secret that Putin and his OPEC allies would rather do business with Donald Trump’s Republicans than with the Democrats.
This is particularly the case for the Saudi Mohammed bin Salman (MBS), who has multiplied largesse towards Donald Trump and his entourage since their departure from the White House. Joe Biden tried to restore ties with MBS last July, but their agreement did not hold.
It is clear that higher prices at the pump in the wake of OPEC’s production tightening will hurt the Democrats’ already slim chance of retaining control of Congress.
Saudi Arabia and the United States need each other, and the Saudi regime maintains that its decision to tighten production does not mean a disavowal of this strategic relationship.
MBS’s about-face, however, suggests that, like his Russian counterpart, the young Saudi leader prefers a long-term relationship with a Republican- and Trumpian-dominated US government.
Not only do Trumpist Republicans care little about issues like democracy and human rights, but they also offer oil producers the best guarantee against enacting real renewable energy transition policies.
In the short term, the power of the cartel of oil-exporting autocrats is very bad news for consumers. In the long term, this power does not bode well, neither for the future of democracy nor for the climate.