The strategic relationship between the United States and Saudi Arabia could change if Riyadh does not end her oil prices war with Russia, said a prominent US senator from an oil-rich state of Alaska.
“The Saudis really caused a supply shock at exactly the wrong time,” Republican Senator Dan Sullivan told CNBC on Wednesday.
“This kind of crisis clearly shows… who your friends are and who are not your friends. “
Sullivan told CNBC that a group of American senators wrote to Saudi Crown Prince Mohammed bin Salman (MBS) and held a conference call with the Saudi ambassador to Washington.
“All of the senators who were on this letter during this conference call with the ambassador were staunch supporters of the United States-Saudi relationship,” said Sullivan. “It will change if the Saudis do not start playing a more constructive role in the energy markets.”
Sullivan said he reminded the Saudi ambassador of the role of the United States in defending the kingdom.
“We have been there for you … First Gulf War, Saddam Hussein is about to cross your country. It was not the Saudi military who arrested him … It was the First Marine Division, 82nd Airborne. Americans died in this war, “said Sullivan.
Saudi-Russian price war
The remarks by the American politician came as the United States hoped to intervene to end the Saudi-Russian oil price war.
Last month, a three-year supply pact between the Organization of the Petroleum Exporting Countries (OPEC) led by Saudi Arabia and its Russian-led allies collapsed after Moscow refused to support the plan from Riyadh for larger production reductions to compensate for the drop in demand resulting from the pandemic coronavirus.
As Saudi Arabia and Russia began to flood the oil market after the deal collapsed, prices fell by around two-thirds – an 18-year low – due to low demand and the global spread of the pandemic.
Saudi Arabia, the world’s largest exporter of crude oil, escalated the price war on Wednesday, pushing crude oil supply to a record 18.8 million barrels in a single day despite pressure from Washington.
Thursday, gross oil eventually jumped 10% after US President Donald Trump said he expected Saudi Arabia and Russia will soon conclude an agreement to end their oil price war.
The collapse prices has threatened the once thriving US drilling industry with major bankruptcies and layoffs, and Washington has sought ways to protect the sector.
Another Republican senator Ted Cruz, who represents Texas’s main oil producer, also participated in the conference call with the Saudi ambassador.
“This behavior is bad, and I think it benefits a country that is a friend,” Cruz said to the ambassador.
Recently, US lawmakers have taken a tougher approach to Riyadh, showing the types of legislative threats the kingdom faces if it doesn’t respond to the administration.
A bill introduced last month by Sullivan and fellow Republican Kevin Cramer would withdraw US troops from the kingdom and displace them. Although the bill is unlikely to get the votes to reach Trump’s office, it has sent a signal to the de facto Saudi leader, Prince Mohammed.
Meanwhile, Trump is expected to discuss a range of options with oil sector leaders to help the industry, including the possibility of tariffs on oil imports of Saudi Arabia, according to the Wall Street Journal.
The main drillers expected to attend the initial meeting on Friday include Exxon Mobil Corp, Chevron Corp, Occidental Petroleum Corp and Continental Resources, the newspaper said.