International oil prices, which have been weak recently, suddenly increased on July 15. North Sea Brent Crude again surpassed $100 per barrel on the same day President Joe Biden visited Saudi Arabia, the world’s largest oil exporter, to seek an increase in production.
President Biden stood alone in front of the press after meeting with Saudi Crown Prince Mohammed bin Salman, which was unusual given he normally appears at a joint press conference with leaders. “With respect to the murder of Khashoggi, I raised it at the top of the meeting, making it clear what I thought of it at the time and what I think about it now,” Biden said, referring to the death of Jamal Khashoggi.
Following President Biden’s meeting with the crown prince, people did not expect the U.S.-Saudi summit would produce results, especially since the president offered a light fist bump to the crown prince instead of a handshake. During his visits to Israel and Palestine, Biden shook hands and even hugged many people. Biden’s approach with the crown prince was enough to give the perception that talks are unwelcome. But neither side has a choice due to international oil prices.
Failure To Induce Saudi Oil Production Increase
President Biden told the press he expects Saudi Arabia to take action in the coming weeks to increase oil supply. But Saudi Foreign Minister Adel al-Jubeir said that “the decision to increase production is based on market demand, not speculation or politics.” The crown prince was also dismissive, saying “We are already producing to the maximum, so it is impossible to increase production further.”
President Biden initially visited Saudi Arabia in effort to keep control on oil prices. He determined that among the 24 OPEC+ countries, the one whose cooperation is essential is Saudi Arabia, which can afford to further increase production. Inflation in the United States is at a 40-year high, hitting 9.1% last month. Rising energy prices are the biggest contributing factor. Biden is feeling a sense of urgency in the face of November’s midterm elections.
In the U.S., many are criticizing Biden for putting the puzzle together wrong. Since taking office last January, Biden has steadily pursued policies to curb fossil fuels such as oil.
Insufficient Supply Due to Eco-Friendly Commitment
On his first day in office, President Biden revoked permission to build the Keystone XL Pipeline, an oil pipeline between the United States and Canada. He also banned drilling on federal lands and in oceans. After strengthening regulations on methane gas emissions, he also announced the disposal of fossil fuels. Oil companies have cut back on reinvesting in shale oil production, and Wall Street has halted all related investment. In other words, President Biden has caused the oil supply shortage himself.
Meanwhile, the Biden administration has been steadily criticizing domestic oil companies, the main point being that it is urgent to take advantage of the surge in oil prices without additional investment in facilities. The White House said that even though oil prices have fallen by 20% since mid-March, companies are not lowering retail gasoline prices enough. But itis closing its eyes to company complaints, insisting that the price of crude oil is reflected in the supply price, and the reason why the price of gasoline has not decreased as much is due to taxes and incidental costs.
President Biden’s approval rating is barely in the mid- to upper-30% range, which, after only a year and six months into office, is an all-time low. There are many who point to the rise in prices and economic conditions that are out of control.
There is a strong call for the U.S. to reconsider its hasty energy conversion policy and focus on expanding its own oil production capacity, which is the world’s greatest. Many experts point out that the solution lies within.