Given Russian sanctions, the rise in oil prices was a 'miscalculation in US foreign policy'.
Countries that have benefited from the conflict in Ukraine are precisely those with significant oil resources—many of them considered enemies or pariahs by the United States.
Sputnik - Countries that have benefited from the conflict in Ukraine are precisely those with significant oil resources—many of them considered enemies or pariahs by the United States—and which were economically fragile due to excessive sanctions imposed by the US, according to an expert interviewed on the Mundioka podcast by Sputnik Brasil.
"Cases that clearly illustrate this point are Venezuela, in South America, and Iran, in the Middle East," exemplifies Pedro Costa Júnior, professor of international relations at the Campinas Faculties (Facamp) and researcher at the University of São Paulo (USP).
In the wake of Russia's special military operation in Ukraine, US Democrats traded barbs with Saudi Arabia after the Organization of the Petroleum Exporting Countries and its allies (OPEC+) announced a decision to cut oil production by 2 million barrels per day.
"Joe Biden had to send envoys to Venezuela to import more barrels of oil from Venezuela and ease sanctions. At this moment, Nicolás Maduro [president of Venezuela] becomes more empowered," Costa pondered. "The Venezuelan economy is very dependent on oil, something that economists call Dutch disease: the country has an abundance of a very valuable natural resource, and this is both a blessing and a curse. Because it is an asset that is extremely valuable to that population and can bring a lot of prosperity. At the same time, it is a curse because it inhibits other sectors of the economy from developing. So Venezuela ends up being very dependent on oil. Given that oil prices started to skyrocket [when the conflict in Ukraine began], it was a miscalculation in American foreign policy."
Costa believes it's possible that Maduro could gain more power because the Venezuelan economy is reacting to the high oil prices.
This shows "the vulnerability and decline of so-called American hegemony," having to submit to a country infinitely smaller in terms of power in the international system, such as Venezuela, "a declared adversary, a state called a pariah, in order to negotiate favorable conditions regarding energy and oil."
The expert adds that even in the face of the myriad of sanctions imposed on Russia, the country itself ended up benefiting greatly from the rise in prices of energy, fuel, gas, oil, and nickel.
This is also the case with Iran, Costa continues. The US is talking about renegotiating the agreements with the Middle Eastern country, which began under Barack Obama, were interrupted by Donald Trump, and which the current president, Joe Biden, is now considering resuming.
However, "Iran is clearly on the Russia-China axis, [and] has strengthened economically [with the Ukrainian conflict] because of oil. And the same thing happened with Venezuela, which is an American adversary in South America, which they consider their backyard. As Joe Biden would say in those disastrous statements, 'I heard in college that Latin America is our backyard, but it's not our backyard, it's our patio, it's our lawn.'"
Between rhetoric and form
Carla Beni, an economist at the Getulio Vargas Foundation (FGV) in São Paulo, believes that with OPEC+'s decision to cut oil production, the threatening tones from Democrats regarding potential retaliation actually signal a message about domestic politics in the US.
They occurred in the context of midterm election campaigns, which form the new US Congress and serve as a validation of the incumbent president's policies.
"I think this response is linked to the Democrats and domestic politics, especially when you see that the White House press secretary [Karine Jean-Pierre] released a statement saying, 'It is clear that OPEC+ is aligning itself with Russia.' Basically, what we see is an explicit response from the Democrats framing Saudi Arabia's action as a hostile act against the US that benefits Russia," he assessed.
She recalls the statement made by the Senate Majority Leader, Democrat Chuck Sumner.
"He said, 'What Saudi Arabia did to help Putin in his despicable and cruel war against Ukraine will be remembered for a long time by Americans.' The tone of the statement should be noted," he indicated.
According to Saudi Arabia, the cut in oil production was necessary because of a weaker global economy, citing economic slowdowns, China's COVID-19 eradication policy, and high inflation.
"What's important to remember is that, on one hand, we see the US and Saudi Arabia with solid diplomatic ties for over 90 years. On the other hand, there's the idea that Crown Prince Mohammed bin Salman prioritized Russia's economic interests at the expense of this partnership with the United States," he opined.
If this rhetoric continues to intensify, with somewhat more aggressive wording, it could cause greater discomfort between the US and Saudi Arabia, according to the economist. However, she insists that these external threatening tones usually indicate more messages for domestic politics.
"Americans are tired of inflation. Part of the population wants to hear that gasoline prices won't go up anymore, or that inflation will fall. And the announced measure reducing global production by 2 million barrels per day starting in November could do the opposite: it could cause prices to skyrocket. Again, regarding the words: what does it mean [that Saudi Arabia] 'will suffer consequences'? It's all very vague and subjective. Probably nothing will happen. It's rhetoric that ends up serving a certain group. In the context of the midterm elections, it's a message for the domestic electorate," he concluded.