Lindsey: President Biden wants more oil from Saudi Arabia

President Biden has to do something about oil, but any adjustments from Saudi Arabia's Mohammed bin Salman will be minimal.

Lower Russian oil supply, declining U.S. refining capacity, slower oil production post-pandemic — these are a number of factors causing today’s high U.S. oil and gas prices. President Joe Biden is hoping Saudi Arabia can help push prices down by asking its Crown Prince, Mohammed bin Salman, to increase his country’s oil production. Straight Arrow News contributor Larry Lindsey argues that Biden, politically speaking, has to do something about oil, but any offering from the Crown Prince will be minimal:

There’s an old saying about Mohammed and the mountain. In this version of it, it goes, if Mohammed won’t go to the mountain, then the mountain will have to go to Mohammed. Now, it turns out Mohammed in this phrasing is actually Mohammed bin Salman, the Crown Prince of Saudi Arabia, and the guy who actually runs things. The mountain, of course, is going to be President Biden.

Biden himself doesn’t like MBS one little bit. During his campaign for the presidency, he called Saudi Arabia “a pariah state.” He, upon taking office, cut off arms sales, did not side with the Saudis against Iran in a proxy war they were having, and actually began to tilt toward Iran — Saudi’s main enemy in the region.

Well, you know why he was going to go? The President wants more oil.

Well, neither the Saudis nor the other place he was going to visit — Israel — were particularly happy with President Biden and so they made sure the photo op wasn’t going to be worth very much.

The President has to do something about oil prices politically, or so it is said, but instead he is now focused on a single new green energy initiative — trying to build more windmills — which isn’t going to do anything for the short term oil crisis, and won’t even come on stream for many, many years.

So either the President is going to have to reverse his domestic war on oil, or he’s going to have to go to the only country that will have any spare capacity left at all. In other words, the mountain eventually is going to have to go to Mohammed.

There’s an old saying about Mohammed and the mountain. In this version of it, it goes, if Mohammed won’t go to the mountain, then the mountain will have to go to Mohammed.

Now, it turns out Mohammed in this phrasing is actually Mohammed bin Salman, the Crown Prince of Saudi Arabia, and the guy who actually runs things. The mountain, of course, is going to be President Biden.

Now, President Biden has had an on again, off again, set of plans to go visit MBS – Mohammed, if you will – in the capital of Riyadh. Just last week, it was on officially at least through leaks to a variety of news networks and then Friday morning, it was off on an announcement solely given by President Biden.

Now, this is not the first time President Biden and his staff have gone in different directions. Usually, it’s the staff that wheels back what Biden said. In this case, it was Biden wheeling back what the staff had said, that’s probably the best explanation.

Biden himself doesn’t like MBS one little bit. During his campaign for the presidency, called Saudi Arabia “ a pariah state.” He upon taking office cut off arms sales, did not side with the Saudis against Iran in a proxy war they were having, and actually began to tilt toward Iran – Saudi’s main enemy in the region.

Well, you know why they were he was going to go, the President wants more oil.

Now, of course, he also wants a photo op so he can point out how successfully he’s managing foreign policy.

Well, neither the Saudis nor the other place he was going to visit – Israel – were particularly happy with President Biden and so they made sure the photo op wasn’t going to be worth very much.

All of the things that Biden was supposed to claim he had arranged, were done before he even got there.

That included giving islands in the Gulf of Aqaba, which controls the entrance of Israel to the Red Sea – they were given to Saudi Arabia by Egypt, on condition that they would be demilitarized. Saudi investment plans have also gone through.

It’s all done before Biden even arrived so in that sense, his reason for going was kind of diminished. Then there was the issue of oil.

Well, Biden was supposed to ask for more oil but the Saudis preempted him. They were going to be raising their amount of OPEC production over three months. Instead, they were going to do it now over two. So the new story is that they are going to increase production in July and August by 648,000 barrels a day. That’s about six tenths of a percent of world consumption.

Well, it really isn’t even that generous because right now only Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq have any spare capacity at all and the quota increase is spread among all 13 members, nine of which have no capacity.

So in fact, the actual increase is more like 360,000 barrels a month. And when August ends, there’s really only going to be one producer left with any oil at all. And that’s Saudi Arabia, which will have spare capacity of about a million barrels a day.

That is a very, very low number for total spare capacity on the planet. Well, the oil markets reacted to all this, as you might expect. They went up $3 In a week, to a new record $120 – or recent record – that’s $12 in the month, and $70 a barrel from 50 to 120 Since President Biden took office.

The President has to do something about oil prices politically or so it is said but instead he is now focused single new green energy initiatives trying to build more windmills, which isn’t going to do anything for the short term oil crisis, and won’t even come on stream for many, many years.

So either the President is going to have to reverse his domestic war on oil, or he’s going to have to go to the only country that will have any spare capacity left at all. In other words, the mountain eventually is going to have to go to Mohammed.