JEDDAH, Saudi Arabia – President Joe Biden heads to another round of meetings with the leaders of oil-producing nations on Saturday amid concerns that Gasoline prices are pushing inflation to its highest levels in 40 years..
“I am doing everything I can to increase supply for the United States of America, which I hope will happen,” Biden said Friday.
But experts say the Saudis may not be willing to commit to producing more oil, or even have the capacity to do so.
Royal meetings: Biden held meetings with King Salman bin Abdulaziz al Saud and Crown Prince Mohammed bin Salman arriving in Saudi Arabia on Friday. Biden said they had a good discussion about stabilizing global energy security and adequate oil supplies to support global economic growth.
No ad: National security adviser Jake Sullivan downplayed expectations for an immediate boost to oil production. “I don’t think you should expect any particular announcement here,” he said, adding that any progress would likely be measured “over the course of weeks” and made through the OPEC+ group of oil-exporting nations.
Sense of urgency: Biden said Saudi leaders share his sense of urgency to improve energy security. “Based on our discussions today, I expect we’ll see more steps in the coming weeks,” he said.
What is about to happen?
Biden will participate in a meeting of leaders of the Gulf Cooperation Council (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates) on Saturday before returning to Washington.
He will also meet personally with the leaders of Iraq, Egypt and the United Arab Emirates.
why does it matter
Biden is under pressure for oil-producing nations to turn on the tap after US inflation. maximum of 40 years in June. The increase was fueled by the high cost of gasoline, food and rent.
Gasoline prices have actually been falling in the United States for several weeks. The average price at the pump on Friday was $4.57 a gallon after peaking at $5 a gallon in June. But lower prices are not reflected in recent inflation figures, released earlier this week, because that data reflects consumer costs in June.
what they are saying
Experts question whether the Saudis have the desire or the ability to produce more oil.
“The Saudis have been talking a lot about getting something like 12 million barrels a day,” said Paul Pillar, a nonresident senior fellow at the Center for Security Studies at Georgetown University. “Currently they are producing around 10½. There’s good reason to believe they couldn’t do anything like 12 million barrels a day over a sustained period of time.”
Saudi Arabia wants to continue running the global oil market through the OPEC oil cartel rather than acting on its own, according to Ben Cahill, an energy security expert at the Center for Strategic and International Studies. While Saudi Arabia is the de facto leader of the OPEC+ group of oil-exporting countries, acting together has helped the oil-rich kingdom navigate major market volatility in recent years.
“They don’t want to do it alone,” Cahill said. “Maintaining cohesion within the group is really a critical priority for them.”
OPEC and its allied producers announced in June that they would increase production by 200,000 barrels a day in July and August.
“The Saudis are reluctant to come out with a clear statement that oil will be increased” beyond the above steps, Martin Indyk, a former US ambassador to Israel, said during an interview on the Israel Policy Pod.
While the Saudis are the only oil-producing exporting country with excess capacity, they also have an agreement with Russia that places restrictions on production, Indyk said.
Even if Saudi Arabia agrees to increase production, it is unlikely to immediately lower prices at gas stations for American drivers, said Karen Young, an energy expert at the Middle East Institute. “Oil has to be refined into gasoline. That’s really more of a problem within our national economy,” Young said. “We don’t have refining capacity and we can’t meet our gas demand.”
“If the administration is serious about increasing supply, it should be meeting with producers here at home instead of looking at governments abroad,” said Mike Sommers, president and CEO of the American Petroleum Institute, which represents to the US oil and gas industry.
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Michael Collins and Maureen Groppe cover the White House. Follow Collins on Twitter @mcollinsNEWS and Groppe @mgroppe.
This article originally appeared on USA TODAY: Biden wants Saudi Arabia to increase production. Will it help gas prices?