Almost every day this week, a new lawmaker lined up behind the growing effort codify into law a fundamental overhaul of the United States’ relationship with Saudi Arabia.
On Monday, Sen. Bob Menendez (D-NJ), the influential head of the Senate Foreign Relations Committee, released a statement calling on the United States to “immediately freeze all aspects of our cooperation with Saudi Arabia.” Later in the week, Sen. Richard Blumenthal (D-CT) and Rep. Ro Khanna published a bill to temporarily halt US arms sales to the kingdom.
This bill “would send a strong message to the Saudis as our country strives to rebalance this one-sided relationship,” the lawmakers said.
Agitation for action comes after OPEC+ – led by Saudi Arabia – announced oil production cuts on October 4 when Congress is notably not in session. Most lawmakers are currently at home focused on the looming midterm elections.
As Ole Hansen, Head of Commodities Strategy at Saxo Bank, recently stated on Yahoo Finance on US and international positioning “we see politics playing a bigger role in this oil market” at the moment as players “still try to figure out what really happened last week at the oil market meeting” ‘OPEC+’.
Although lawmakers aren’t expected to return to Washington until Nov. 14, White House action could come sooner, with President Biden saying in a CNN interview this week “there will be consequences” for Saudi Arabia. Biden Thursday teased some sort of action from the White House on gasoline prices in the coming daysalthough it is unclear if next week’s decision will directly affect Saudi Arabia.
Jared Bernstein, a member of the White House Council of Economic Advisers, made this point. in a Yahoo Finance Live interview on Thursday saying “we need to do more, especially in light of this mistaken and, I think, very misguided decision by OPEC+”.
A panoply of ideas for action
Back on Capitol Hill, the list of lawmakers urging action grew.
Additional calls in recent days have come from figures such as Senator Chris Murphy (D-CT), Senator Bernie Sanders (I-VT), Rep. Tom Malinowski (D-NJ), and more. Malinowski make their own efforts to order the withdrawal of US troops and missile defense systems from Saudi Arabia and the United Arab Emirates.
The main Republican co-sponsors (at least so far) are absent from the debate surrounding Saudi Arabia. In one of his only comments on the matter, Senate Minority Leader Mitch McConnell (R-KY) sent a press release criticizing Democrats who raise the issue for “voting to throttle U.S. oil and gas production at every opportunity for the past two years.”
Oil analyst Frank Macchiarola of the American Petroleum Institute recently underscored this prospect, saying Yahoo Finance who a lesson from the past few weeks is “how important it is to produce energy here in the United States, and not have to depend on foreign countries, like OPEC+ countries, for our energy.”
Another idea that has received renewed scrutiny in recent weeks is a bipartisan bill that has been bouncing around Congress for years dubbed “NOPEC.” who advanced to the Senate earlier this year. The bill would remove sovereign immunity and allow the Justice Department to sue Saudi Arabia and other OPEC+ members for antitrust violations.
Last week, a prominent Republican supporter of that effort, Sen. Chuck Grassley (R-IA) pushed to a new examination. Capitol Hill leaders hope to coalesce the ideas into a cohesive bill that can be signed into law this winter.
Biden ‘looks forward to engaging Congress when he returns’
Meanwhile, the price of crude oil – after surging on OPEC’s announcement – has fallen in recent days. Some energy analysts say many OPEC countries were producing below their quotas before last week’s announcement, so the impact could be less than initially feared.
But in the political sphere, the back and forth are likely to continue. In a recent statement, OPEC said the White House had sought to delay production cuts for a month while a parade of administration officials, from the president down, criticized the decision.
In one example, Treasury Secretary Janet Yellen warned that OPEC’s oil production cut would have a negative effect on the global economy, telling the Financial Times the decision is “unnecessary and reckless”.
In a call with reporters this week, National Security Advisor Jake Sullivan said “there are a range of interests and values that are involved in our relationship with this country,” adding that Biden “has look forward to engaging Congress when he returns.”
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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