A positive sign for Biden: Saudi Arabia wants to increase potential oil production

A positive sign for Biden
Saudi Arabia wants to increase potential oil production

07/16/2022 at 8:14 pm

No concrete commitment, but Saudi Arabia still sends US President Biden on his way home with a gift. Riyadh is increasing its potential oil production capacity by one million barrels. This can reduce the rise in gasoline and diesel prices.

In the discussion about a stronger expansion in global oil production, Saudi Arabia wants to increase its potential production capacity by 1 million barrels per day. Saudi Crown Prince Mohammed bin Salman announced during US President Joe Biden’s visit to Jeddah that the maximum amount should be increased from the current 12 million barrels to 13 million barrels.

In addition, he said, the kingdom no longer had the additional capacity to increase production. However, the crown prince made no promises that he would actually produce more oil.

Biden and Crown Prince Mohammed attended the Gulf Cooperation Council summit in Jeddah – along with other oil heavyweights such as Iraq, Kuwait and the United Arab Emirates. In a joint statement the previous evening, the United States and Saudi Arabia had already spoken of Saudi Arabia’s commitment to work to “balance global oil markets.”

The increase in production capacity should be a positive sign for Biden. In the United States, a few months before the important congressional elections, this is under pressure due to the sharp rise in gasoline prices. An increase in supply would indirectly help reduce gasoline and diesel prices. Ultimately, however, the OPEC+ oil alliance decides how much oil will actually be produced.

According to the group, Saudi Arabia’s production target for August is just over 11 million barrels per day. However, the country only reached this level for a few months in 2018 and 2020. According to the state-owned Saudi Aramco, it can extract about 12 million barrels of oil from the ground per day.