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Saudi Arabia slams US for using oil reserves to manipulate prices, warns of ‘painful’ future

US President Joe Biden (L) and Saudi Arabian Crown Prince Mohammed bin Salman are seen at Alsalam Royal Palace in Jeddah, Saudi Arabia, on July 15, 2022. (File photo by Royal Court of Saudi Arabia)

As rift between Saudi Arabia and the United States widens over oil production, Saudi energy minister has denounced nations, including the US, for using emergency oil reserves to manipulate prices, warning of more pain for energy markets in near future. 

"People are depleting their emergency stocks, had depleted it, used it as a mechanism to manipulate markets while its profound purpose was to mitigate the shortage of supply," said Saudi Arabia's energy chief Prince Abdulaziz bin Salman at the Future Initiative Investment (FII) conference in Riyadh on Tuesday.

"However, it is my profound duty to make clear to the world that losing emergency stocks may be painful in the months to come."

The Saudi energy chief said Riyadh remained the world's most reliable oil supplier and had increased its sales to Europe to 950,000 barrels in September from 490,000 the same time a year ago.

When asked about how to get the energy ties with Washington back on track, Prince Abdulaziz said Riyadh had chosen to "to be the mature guys and let the dice fall."

Although Prince Abdulaziz did not single out the US in his comments, he appeared to be critical of President Joe Biden's decision to sell oil from the nation's emergency stocks as he attempts to lower gasoline prices ahead of midterm elections on November 8.

Comments by the Saudi energy chief came just a week after Washington decided to release 15 million barrels from strategic oil reserves to curb prices. That tranche was to complete a 180-million-barrel release authorized in the spring, in response to price hikes linked to Russia's military operation in Ukraine.

Tensions are growing between longtime partners Washington and Riyadh over the Saudi-led OPEC+ cartel’s recent vote to reduce oil production over Washington's objections. 

The Organization of the Petroleum Exporting Countries and allies (OPEC+), which includes the 13 OPEC nations and 11 non-members including Russia, made the production cut announcement earlier this month. The group agreed to cut output by two million barrels per day, equal to two percent of global supply, starting November.

Saudi Arabia is a top producer in OPEC+.

The move came despite Biden's plea to boost production to tame energy prices.

Independent observers believe the Biden administration is worried that the decision to cut oil production will cause a gas price hike in the US ahead of the November midterm elections, which Democrats already appear to lose to the Republicans.

Separately, US State Department spokesman Ned Price said he would not respond directly to the Saudi energy chief, but that the release from the strategic reserves was part of Biden's effort to meet demand. "We're going to do everything we can to see to it that supply is adequate for demand," Price said.

Bin Salman 'mocks Biden in private' and 'preferred Trump': Report

According to a report by the Wall Street Journal, the relationship between longtime allies the US and Saudi Arabia is fracturing due to distrust between the leaders of the two countries.

The report, citing unnamed sources within the Saudi government, said that Saudi Crown Prince Mohammed bin Salman - known as MbS - makes fun of Biden in private and has questioned his mental acuity.

Furthermore, the crown prince, who is Saudi Arabia de facto ruler, has reportedly told his advisers that he preferred working with former US President Donald Trump. 

"Saudi Crown Prince Mohammed bin Salman, the kingdom’s 37-year-old day-to-day ruler, mocks President Biden in private, making fun of the 79-year-old’s gaffes and questioning his mental acuity, according to people inside the Saudi government. He has told advisers he hasn’t been impressed with Mr. Biden since his days as vice president, and much preferred former President Donald Trump, the people said," the report read.

Biden repeatedly denounced Saudi Arabia for its grim human rights record. During his presidential campaign in 2020, he said he saw "very little social redeeming value in the present government in Saudi Arabia," and did not even talk to Mohammed bin Salman for more than a year because of his alleged role in the killing of dissident Saudi journalist Jamal Khashoggi in the Saudi consulate in Istanbul in 2018. 

Both Saudi Arabia and the US are reportedly ready to reconsider their relations, which would mark a significant change in the 80-year-long relationship, the one that has long underpinned the global economy. 

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