Positive signal to Biden
Saudi Arabia wants to increase potential oil production
07/16/2022, 8:14 pm
There is no concrete commitment, but Saudi Arabia is still sending US President Biden home with a gift. Riyadh is increasing its potential oil production capacity by one million barrels. This can bring down the high prices of petrol and diesel.
In discussions about a strong expansion of global oil production, Saudi Arabia is looking to increase its potential production capacity by one million barrels per day. Saudi Crown Prince Mohammed bin Salman announced during US President Joe Biden’s visit to Jeddah that the maximum possible amount should be increased to 13 million barrels from the current 12.
Besides, the state no longer has the spare capacity to increase production, he said. However, the Crown Prince made no promises that he would actually produce more oil.
Biden and Crown Prince Mohammed attended a summit of the Gulf Cooperation Council in Jeddah – along with other oil giants Iraq, Kuwait and the United Arab Emirates. In a joint statement last evening, the United States and Saudi Arabia had already spoken of Saudi Arabia’s obligation to work toward “balancing global oil markets.”
An increase in production capacity should be a positive sign for Biden. In the United States, it is under pressure due to a sharp increase in petrol prices, months before important congressional elections. A higher supply would indirectly help bring down the prices of petrol and diesel. Ultimately, however, the OPEC+ oil alliance decides on the actual oil production volume.
According to the group, Saudi Arabia’s production target for August exceeds 11 million barrels per day. However, the country reached this level only for a few months in 2018 and 2020. According to Saudi Aramco, a Saudi state-owned company, it can extract about 12 million barrels of oil from the ground every day.
