The Saudis put Biden’s hand in henna/ Saudi Arabia cannot increase oil exports
According to the report of the International Economy Group of Fars News Agency, quoted by Reuters, US President Joe Biden recently traveled to the Middle East for several days in order to increase the supply of oil to the world market and reduce prices in the shadow of improving relations with the Saudis.
This trip ended without concrete results regarding the increase of Saudi oil exports. The reason why Biden went to Saudi Arabia was the sharp increase in the price of gasoline in the United States and inflation reaching the highest point in the last 40 years in this country.
During this trip, Biden met with the heads of 6 Arab countries in the Persian Gulf region, along with Egypt, Jordan and Iraq, and also met with the king and crown prince of Saudi Arabia.
* What do Biden’s relatives say?
During an interview with a television network, Amos Hochstein, the advisor of the US government in the field of energy, has claimed that in the coming weeks, the major oil producing countries that have the ability to produce more are going to increase their production based on Biden’s talks with them.
During an interview with CBS, he said that based on what we have heard during this trip, I am quite sure that we will see more actions in this field in the coming weeks.
Of course, this American official did not mention which country or countries and to what extent they are going to increase their oil production.
The adviser of the American government in the field of energy said; This issue is not only related to the Saudis, we met with the officials of the Persian Gulf Cooperation Council. I don’t want to mention the excess oil production capacity in Saudi Arabia, UAE and Kuwait or other countries, but there is more oil production capacity. There is room to increase production.
Reuters claims that Biden failed to get a guarantee to increase production from Arab countries during this trip.
Mohammed bin Salman, the crown prince of Saudi Arabia, recently said that unrealistic anti-pollution policies will cause a sharp increase in the inflation rate in the coming years.
He also said that the consequences of the spread of the Corona virus and the current geopolitical situation have made the need for joint measures to support the global economy more felt, and moving towards sustainable energy sources requires a more responsible and realistic approach.
He called for more investment in the production of fossil fuels as well as technologies related to clean energy.
Saudi Foreign Minister Faisal bin Farhan also said that OPEC+ will continue to evaluate the market situation and will do whatever is needed.
The Saudi Foreign Minister said that there was no discussion about oil during the meeting between the heads of the Arab countries and the US President.
Considering that the member countries of OPEC and the oil partners of this group known as OPEC+ are ending their agreement to reduce the supply of oil to the world market that was signed in 2020, there is a view that Saudi Arabia and the UAE are the only countries OPEC members have the possibility to increase their oil production and export to a large extent.
In general, OPEC’s oil production capacity has been limited for various reasons, including a long period of falling oil prices due to excess supply from 2014 to 2016 and a reduction in oil drilling activities due to the consequences of the spread of the Corona virus.
Oil industry experts and sources say: The oil-producing countries of the Persian Gulf, including Saudi Arabia, are not immune to these events, and these issues have limited the capacity of any increase in production and export by these countries, at least in the short term.
What do the Saudis say?
Saudi Aramco state oil company announced in a statement a few days ago that the company still maintains the maximum production capacity of 12 million barrels per day and reached this figure two years ago. Considering that Saudi Arabia produced an average of 10.65 million barrels of oil per day in June, according to Aramco, this country has the capacity to produce another 1.35 million barrels per day.
Mohammad bin Salman also claimed on Saturday that Riyadh will increase its oil production to 13 million barrels per day by 2027 and will no longer have the capacity to increase production.
* How much more oil can the Saudis produce?
Two well-informed sources in the oil field have expressed doubts about Saudi Arabia’s ability to reach the daily production figure of 12 million barrels of oil.
A high-ranking source says: Aramco can supply a maximum of one million barrels of oil per day, compared to the 10.5 million barrels per day that the company is currently producing. This means that Aramco cannot produce more than 11.5 million barrels per day.
Another well-informed source also said: Based on private conversations with sources inside Aramco, the company cannot produce more than 11 million barrels of oil per day without touching its oil reserves.
What does the president of France say?
During a conversation with Biden in June, French President Emmanuel Macron claimed that Saudi Arabia has very little capacity to increase oil exports.
Macron said that the president of the UAE told him that Saudi Arabia can increase its oil production by a maximum of 150,000 barrels per day or a little more, and that it does not have much capacity to increase exports at least in the next 6 months.
In his talks with the American president, Macron said that the president of the UAE also said that his country is currently producing oil at its maximum capacity.
Sohail Mohammad Al-Mazrouei, the Minister of Energy of the UAE, confirmed Macron’s words and said that based on the media reports, I want to make it clear that the UAE is producing at its maximum capacity.
The UAE’s current oil production is 3 million barrels and this country is trying to increase its oil production capacity to 4 million barrels per day.
* Will the withdrawal of the Saudis from the oil warehouses help?
Saudi Arabia can temporarily increase its oil supply to the world market by withdrawing from its oil warehouses that have stored oil inside and outside the country.
Aramco has not announced the amount of its stored oil, but experts have estimated that the company can supply 300,000 to 500,000 barrels per day to the world market within 60 to 90 days.
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