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Why the Saudis Won't Pump More Oil

Just as Saudi Arabia refused to accommodate American requests to increase oil production last November, it is likely to refuse US President Joe Biden’s request today. When the Saudis increase their production, it will be because doing so is in their own interest.

PARIS – America’s relationship with Saudi Arabia has hit a new low. Following its ban on imports of Russian oil – part of a sweeping set of economic sanctions imposed on Russia in response to its invasion of Ukraine – the United States hopes that Saudi Arabia and the United Arab Emirates will boost production to rein in skyrocketing prices. But Saudi and Emirati leaders have reportedly been declining US President Joe Biden’s calls.

Biden is also looking elsewhere. A US delegation reportedly visited Venezuela – with which the US severed diplomatic relations in 2019 – to discuss the possibility of lifting oil sanctions on the country. But neither Venezuela nor Iran could realistically make up for the loss of around 2.5 million barrels per day of Russian crude. Both countries’ rundown oil fields and national oil companies would need to be revitalized before production could be increased – a process that would take many months, if not years.

For now, Saudi Arabia, which leads the OPEC producers’ cartel, and the UAE are the only two oil producers with significant spare capacity. Only they have the power to stabilize the market, thereby preventing prices from reaching – or even exceeding – $150 per barrel. This puts Biden in a quandary.