Fate of Middle East oil producers turns on Biden’s actions on climate and Iran

As President-elect Joe Biden prepares to enter the White House, one might presume that the campaign rhetoric of the Democratic Party will be pared back as the real costs of some of the more radical proposals become apparent. Most observers would contend, however, that the odds are low that a “tack back to the centre” (à la former president Bill Clinton) will happen.

The Middle East is at a crossroads, and Biden’s policy choices will be critical in the outlook for the region’s oil and gas producers. In his last debate with Donald Trump, Biden’s pledge to “transition away from the oil industry” put climate change concerns as the top policy priority. The contrast in Republican and Democratic world views over fossil fuels and global energy geopolitics could not be starker. Biden is more committed than any previous presidential nominee to radical climate action.

The United States recently overtook Saudi Arabia as the world’s largest petroleum producer. In response, Saudi Arabia launched last year a self-debilitating and unsuccessful price war to starve out the producers behind the US “shale revolution”. But US oil producers have been facing pressure not only from Saudi Arabia and its allies in the Opec oil producers’ cartel.

In 2017, a report by the US Director of National Intelligence accused forces in Russia, a major oil producer, of pushing anti-fracking environmental propaganda, and US intelligence reports have been cited in accusations of Russian funding for anti-fracking groups. “By targeting fracking, Putin hopes to increase oil and gas prices, destabilise the US economy and threaten America’s energy independence,” said a Newsweek report that year.

The surge in US oil and gas production over the past decade allowed Trump to pursue his “America first” and “energy dominance” agendas. It increased US foreign policy leverage, giving his administration greater latitude in supporting allies and sanctioning rivals.