‘A slap in the face’: Saudis spurn Biden’s request to boost oil output

‘A slap in the face’: Saudis spurn Biden’s request to boost oil output

Posted For: Willie Wonka

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President Biden’s trip to Saudi Arabia was deemed a failure by analysts after oil-producing states announced Wednesday that they would boost output by just 100,000 barrels a day starting next month — a drop in the bucket compared to America’s vast energy needs.

The Saudi-led Organization of Petroleum Exporting Countries and its allies announced the modest increase in supply following a policy meeting held via videoconference.

The Biden administration had held out hopes that its diplomatic overtures to the de facto Saudi ruler — Crown Prince Mohammad bin Salman — would yield a bigger boost in supply.

Americans consumed an average of 19.78 million barrels of oil per day in 2021, according to the US Energy Information Administration — meaning Wednesday’s production increase would meet between seven and seven-and-a-half minutes’ worth of nationwide demand.

Biden reversed his campaign pledge to treat bin Salman as a “pariah” due to widespread Western intelligence assessments that the Saudi royal masterminded the murder of US-based Saudi dissident journalist Jamal Khashoggi.

The president was photographed giving bin Salman a “fist bump” during their meeting in Jeddah last month.

Despite the diplomacy, the cartel opted to keep supplies tight while prices remain high. The 100,000 barrels a day boost is a far cry from the 648,000-barrels-a-day increase that was announced in June.

The OPEC+ meeting’s participants put out a statement on Wednesday acknowledging that “the severely limited availability of excess capacity necessitates utilizing it with great caution in response to severe supply disruptions.”

Analysts said the OPEC+ announcement amounted to a failure by the president.

“It’s a slap in the face for the Biden administration,” Matt Smith, a lead analyst at trade analytics firm Kpler, told CNN.

“This trip, meeting with MBS, just didn’t work.”

The US hoped that the Saudi-led cartel would boost production and send gas prices down even further in the run-up to midterm elections.

Americans have experienced some relief at the pump in recent weeks as gas prices have gradually retreated from record highs earlier this summer.

As of Wednesday, the average cost of a gallon of regular unleaded fuel stood at $4.16 nationwide — down from $4.81 a month ago, but up from $3.18 at this time last year.

In the last 10 days, the price of gas has fallen some 20 cents.

But analysts warn that the ongoing Russian invasion of Ukraine as well as a surge in demand could easily reverse that trend.

Robert Yawger, vice president of energy futures at Mizuho Securities, agreed with Smith.

“I must say I am surprised they only threw in 100,000 barrels per day,” Yawger said.

The White House on Wednesday acknowledged that the announcement will not have a noticeable impact on gas prices.

When asked if Americans can expect the OPEC+ move to make gas prices fall precipitously in the near future, Amos Hochstein, the White House’s top energy adviser for energy security, told CNN: “Well, no it doesn’t.”

Last month, Hochstein said he was “pretty confident” that OPEC+ would significantly boost production “as a result of the president’s conversations.”

Hochstein said on Wednesday that the OPEC+ move was a “step in the right direction,” but he declined to answer when asked if Biden was disappointed.

White House press secretary Karine Jean-Pierre insisted, however, that Biden’s trip could still be counted as a success because it coincided with a Saudi decision to open airspace to Israeli planes and because Riyadh continues to honor a truce in Yemen’s civil war that has been in place since April.

“We think that the trip was certainly worth it,” the press secretary said.

When a reporter pressed Jean-Pierre about whether Biden “got what he wanted” from the trip, the press secretary referred to a chart that showed gas prices trending downward after hitting all-time average highs of more than $5 per gallon in mid-June.

“If you think about it, this is a one month increase,” Jean-Pierre said of the OPEC+ decision. “But the president’s gonna continue to do the work… When it comes to gas prices and oil production and meeting supply, we’re going to continue to work on that.”

https://nypost.com/2022/08/03/saudis-thumb-nose-at-bidens-request-to-boost-oil-output/

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