Nearly every day this week, a new lawmaker has lined up behind the growing effort to codify into law a fundamental rethinking of the U.S. relationship with Saudi Arabia.
On Monday, Sen. Bob Menendez (D-NJ), the influential head of the Senate Foreign Relations Committee, released a statement calling for the US to “immediately freeze all aspects of our cooperation with Saudi Arabia.” Later in the week, Sen. Richard Blumenthal (D-CT) and Rep. Ro Khanna released a bill to temporarily halt U.S. arms sales to the kingdom.
That bill would “send a strong message to the Saudis as our country works to rebalance this one-sided relationship” lawmakers say.
The agitation for action comes after OPEC+ – led by Saudi Arabia – announced oil production cuts on Oct. 4 while Congress notably isn’t in session. Most lawmakers are currently at home focused on the looming midterm elections.
As Ole Hansen, Saxo Bank Head of Commodity Strategy, said recently on Yahoo Finance about the U.S. and international positioning “we are seeing politics playing a greater part in this oil market” right now as players are “still trying to work out what really happened last week in the OPEC+ meeting.”
While lawmakers aren’t scheduled to return to Washington until Nov. 14, action from the White House might come sooner with President Biden saying in a CNN interview this week “there will be consequences” for Saudi Arabia. On Thursday Biden teased some sort of White House action on gas prices in the coming days, though it’s unclear if next week’s move will concern Saudi Arabia directly.
White House Council of Economic Advisers member Jared Bernstein underlined the point in a Yahoo Finance Live interview Thursday saying “we have to do more, especially in the light of this misguided and, I think, a very wrong-headed decision by OPEC+.”
A range of ideas for action
Back on Capitol Hill, the list of lawmakers prodding for action has grown.
Additional calls in recent days have come from figures like Sen. Chris Murphy (D-CT), Sen. Bernie Sanders (I-VT), Rep. Tom Malinowski (D-NJ), and more. Malinowski is leading their own effort to mandate the removal of U.S. troops and missile defense systems from Saudi Arabia as well as from the United Arab Emirates.
Notably missing from the debate circling after Saudi Arabia are prominent Republican cosponsors (so far at least). In one of his only comments on the issue, Senate Minority Leader Mitch McConnell (R-KY) sent out a press release criticizing Democrats who are raising the issue for having “voted to strangle American oil and gas production at every single opportunity over the last two years.”
Oil analyst Frank Macchiarola of the American Petroleum Institute recently underlined that perspective, telling Yahoo Finance that a lesson from recent weeks is “how important it is to produce energy here in the United States, and not have to rely on foreign countries, like the OPEC+ nations, for our energy.”
Another idea receiving renewed consideration in recent weeks is a bipartisan bill that has bounced around Congress for years dubbed “NOPEC” which advanced in the Senate earlier this year. The bill would remove sovereign immunity and authorize the Justice Department to bring suits against Saudi Arabia and other members of OPEC+ for antitrust violations.
Last week a prominent Republican backer of that effort, Sen. Chuck Grassley (R-IA) pushed for renewed consideration. Capitol Hill leaders are hoping to merge the ideas together into a cohesive bill that can be enacted this winter.
Biden ‘looks forward to engaging the Congress when they return’
Meanwhile the price of crude oil – after shooting up on OPEC’s announcement – has fallen in recent days. Some energy analysts say that many OPEC nations were producing below their quotas before last week’s announcement, so the impact might be less than initially feared.
But in the political sphere, the back and forth is likely to continue. In a recent statement, OPEC said that the White House had sought to delay the production cuts for a month while a parade of administration officials from the president on down have slammed the decision.
In one example, Treasury Secretary Janet Yellen warned that OPEC’s oil production cut will have a negative effect on the global economy, telling the Financial Times the decision is “unhelpful and unwise.”
In a call with reporters this week, National Security Advisor Jake Sullivan said “there is a range of interests and values that are implicated in our relationship with that country,” adding that Biden “looks forward to engaging the Congress when they return.”
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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