Biden’s Failed Oil Diplomacy

I mentioned a week or two ago that it didn’t look like President Biden’s initiatives to persuade OPEC and its partners to boost output were very successful.

Saudi Arabia Boasts Oil Purchased From Russia

Throughout the summer, Saudi Arabia boosted the amount of fuel oil it was purchasing from Russia for its power plants.

This ended up relieving its own crude for export as the United States, Canada, and a number of European nations reduced their dependence on imported oil from Russia.

This month, in a bid to support declining oil prices globally, Russia and Saudi Arabia persuaded the Organization of the Petroleum Exporting Countries and its affiliated producers to lower output targets.

This move should boost both countries’ oil earnings. When combined, the actions show a clear Saudi inclination toward Moscow and away from the United States.

Of course, the administration’s attempts to reach an agreement with the terrorist regime won’t have assisted, at least since the Saudis are not overly grateful for what a freer supply of Iranian oil may do to the oil price.

Tehran and Riyadh aren’t the most simpatico partners in negotiations.

The NYT

The Saudis are essentially making it harder for the United States and the European Union to restrict Putin by collaborating more closely with Russia.

Saudi Arabia and other nations like China and India are jumping in as buyers of last resort as Europe prepares to significantly reduce the amount of oil it imports from Russia.

OPEC Plus showed its autonomy from President Biden by announcing a modest output cut this month. Biden visited Saudi Arabia in July and gave Prince Mohammed a fist bump.

The visit was largely perceived as Biden’s attempt to mend ties between the United States and Saudi Arabia after he lambasted the country for the killing of Washington Post columnist Jamal Khashoggi.

Handshake followed by a punch to the face

The United States and other western nations, according to some Middle Eastern energy executives, have not been dependable allies for oil exporters.

This is in large part because of their efforts to wean the planet off fossil fuels in an effort to combat climate change.

If the shift away from CO2 happens as planned, which it won’t, but that’s another story, the West is an unreliable long-term consumer.

Though it’s also a client that, as a result of climate policy, is now consciously reducing its own capacity to fight back against rising oil costs.

Renewable energy sources won’t bring about energy independence on their own, given the current state of technology.

Even if the West accelerates, as it should, down the nuclear route (I wonder what a Russian-engineered accident at the Zaporizhzhia plant in Ukraine would do to those plans), that will take years.

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