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OPEC has the capacity to raise crude oil production, White House National Security Advisor Jake Sullivan said days before U.S. President Joe Biden is set to visit the Middle East, where he will hold talks with leaders of the top OPEC oil producers.
“We do believe there is a capacity for further steps that could be taken,” Sullivan said during a press briefing on Monday.
President Biden and his team will make the case for higher OPEC oil production during meetings with leaders from the Gulf states in Saudi Arabia, Sullivan said at the briefing.
“We will convey our general view…that we believe that there needs to be adequate supply in the global market to protect the global economy and to protect the American consumer at the pump,” Sullivan said, as carried by Reuters.
President Biden will visit later this week Saudi Arabia, the world’s top crude oil exporter, which he had previously said he would treat as a “pariah” state during his presidency.
However, the market turmoil following the Russian invasion of Ukraine and the highest gasoline prices in America on record ahead of the mid-term elections in November have had the President call on OPEC multiple times in recent months, with suggestions that the group needs to increase production more than the monthly rollback of their production cuts.
Analysts say that OPEC’s actual spare capacity could be less than official figures suggest and that, in fact, Saudi Arabia and the United Arab Emirates (UAE)—two producers believed to hold most of the world’s spare capacity—cannot pump too much crude oil above current levels for a sustainable period.
Most analysts don’t expect major production hikes from OPEC following President Biden’s visit as they see the Gulf producers not rushing to tap their already very low spare capacity.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.