By Tiyana-Marie Bassim | February 24, 2022
The United States and Saudi Arabia have a bilateral economic relationship, with the United States being Saudi’s second-largest trading partner. Arguably the most critical good traded is oil. In fact, Saudi Arabia is the third leading source of imported oil for the United States. COVID-19 has not been a sympathizing factor for Saudi Arabia, as they raised oil prices for Asian and American buyers. The Saudi mindset seems to allude to the fact that demand is staying strong even in light of the recent omicron variant. The Organization of Petroleum Exploiting Countries (Including Saudi Arabia and Russia) and its allies informed traders of a decision to boost crude output. Saudi Aramco increased the prices of all crude grades in January to the United States and Asia. This is also true for February and March’s prices. Arab crude in March to the United States was raised by 30 cents a barrel and 60 cents for Asian consumers. Saudi Arabia’s crude OSPs come out around the fifth of every month, and their pricing is important due to the fact they set the trend that Iran, Kuwait, and Iraq price. Increasing oil prices positively impacts the country exporting the oil, whereas the opposite is true for importing countries. However, it is important to ask how far each side is willing to push each other for this liquid gold that makes the world go round? A Saudi-led coalition fighting Yemen’s Houthi rebels launched an airstrike targeting Yemen’s capital following an attack that killed three in Abu Dhabi. In general, these Saudi-led coalitions have launched airstrikes that have led to thousands of civilians dead in Yemen. The United States in the past has threatened to cut off sales of U.S. arms, but will this be extended to oil where Saudi will lose a trading partner? Although “Saudi Arabia has not, and will not, seek to intentionally damage U.S. shale oil producers,” according to Saudis’ lobbyists in D.C., when will the United States put its food down?
Edited by Zachary Elias