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There will be no public announcements about an oil supply rise during or after U.S. President Joe Biden’s visit to Saudi Arabia, Bloomberg reported on Friday, quoting sources with knowledge of the matter.
President Biden is visiting Saudi Arabia today, where he will meet King Salman bin Abdulaziz and Crown Prince Mohammed bin Salman, after making a U-turn in his attitude toward the Kingdom.
Soaring oil prices and record national average gasoline prices of over $5 per gallon in the United States on some days in June, months before the midterm elections, have prompted President Biden to consider a visit to Saudi Arabia and a meeting with its rulers. Two years ago, he described Saudi Arabia as a “pariah” state and criticized it for its track record of abuses of human rights.
In an op-ed published in The Washington Post on Saturday, President Biden defended his decision to visit Saudi Arabia, writing that the Middle East’s “energy resources are vital for mitigating the impact on global supplies of Russia’s war in Ukraine.”
But Saudi Arabia, the world’s biggest crude oil exporter, may not have the capacity and/or the willingness to tap deeper into capacity despite the continuous calls from major oil-consuming nations.
The U.S. doesn’t expect the Saudis to raise production immediately, a U.S. official told Reuters just before President Biden’s visit to Saudi Arabia. The United States will be looking closely at what will happen at the next meeting of the OPEC+ group in early August, the U.S. official said.
Saudi Arabia and the UAE are believed to hold most of the world’s spare capacity, which is critically low now, analysts say. Experts also point out that Saudi Arabia would likely prefer to manage oil supply via the OPEC+ agreements rather than with unilateral increases in production. The Saudis are also looking to keep their cooperation with Russia as part of the OPEC+ pact.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.