The Biden administration has dropped threats to retaliate against Saudi Arabia for an oil-production cut last year and is moving to step up security coordination to counter Iran in 2023, U.S. and Saudi officials said, three months after ties hit a historic low point.

Officials pointed to signs of improved U.S.-Saudi cooperation in recent weeks as falling U.S. gasoline prices, better-than-expected midterm election results for Democrats, and heightened concerns about Iran take the edge off a long-simmering spat that spilled into the open in October when the Saudis rebuffed White House requests to delay the production cut.