Biden’s Quest for Saudi Oil Faces Reality-Check of Slim Capacity - Bloomberg
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Even if Joe Biden secures a pledge for more oil when he visits Saudi Arabia this week, it may do little to drive down the high fuel prices roiling the global economy.
The US president’s visit to a country he once vowed to isolate represents a significant thawing of relations, but the Saudis and their OPEC partners have limited spare production capacity to offer in return for this political concession. Some market watchers also question whether tapping this supply buffer would calm energy markets, or just make matters worse.
“A surge in Saudi production seems unlikely,” said Ben Cahill, senior fellow at the Center for Strategic and International Studies. “Saudi Arabia and OPEC+ have very limited spare capacity, and they have to manage it carefully.”
Oil prices retreated last week, but remain above $100 a barrel. World crude production and refining output are still struggling to keep pace with the post-pandemic rebound in demand and the supply disruption resulting from sanctions on Russia over the invasion of Ukraine. The price of gasoline remains a source of political peril for a president heading to mid-term elections with approval ratings near 40%.
Biden's Risky Middle East Trip an Opportunity for Energy Markets - Bloomberg
President Joe Biden is headed to the Middle East this week, seeking to prod Saudi Arabia and the other oil producers in the region to pump more crude to help bring down energy prices. Bloomberg News reports that without a pledge from the Saudis and the United Arab Emirates — the two key members of OPEC — to boost production, Biden would lose a powerful tool for alleviating the economic and political pain caused by high fuel prices. Biden, who will first make a stop in Israel, is unlikely to encounter sympathetic crowds, especially after criticizing Saudi Arabia’s human-rights record while running for president.
Here’s what Bloomberg Opinion columnists and contributors have been saying about what Biden needs to accomplish during the trip and what’s at stake:
Biden Needs to Seek More Than Oil From Saudi Arabia
“In agreeing to visit Saudi Arabia, US President Joe Biden has stepped back from his vow to treat the country as a ‘pariah.’ Critics have blasted him for overlooking Saudi human-rights violations, including the brutal murder and dismemberment of former Washington Post columnist Jamal Khashoggi. In exchange, Biden has won only a token increase in oil production that won’t do much to lower gas prices at home. Even so, Biden’s trip can serve a valuable purpose. Healthy US-Saudi ties are critical to calming a volatile part of the world and stabilizing global energy markets.” — Bloomberg’s editorial board
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