London: Joe Biden will visit Saudi Arabia for the first time as US President on Friday in an attempt to persuade Riyadh to pump more oil and lower prices to raise inflation to the highest levels in decades. Prior to his election, Saudi Arabia is a “Pariah” state following the 2018 killing of dissident journalist Jamal Khashoggi in readjusting relations with the OPEC oil cartel’s kingpin oil-producing country. I swore that I should.
However, since then Russia, a major oil producer, has invaded Ukraine, pushing oil prices to the levels last seen during the 2008 global financial crisis. It pushed US inflation to its highest rate in more than 40 years-and it could still persuade Biden to set aside human rights concerns before the major US midterm elections in November. Experts say. OANDA analyst Craig Ahram told AFP, “at least it highlights his despair before the midterm elections, which appears to be trying to ease market tightness and lower prices.” “In a desperate era, desperate measures are needed.”
OPEC transaction expires
Biden’s chances could be boosted by the looming expiration of significant transactions between the broader so-called OPEC + groups to boost oil production. OPEC + consists of 13 OPECs led by Saudi Arabia and 10 partners led by Russia. The group previously reduced production in 2020, when demand declined due to the blockade of Covid pandemics around the world. However, since last year, countries have gradually reopened their faucets as their economies recover.
Last month, OPEC + stuck to the previously agreed high output and avoided demanding significant price increases to curb price increases. The deal will soon be on track as OPEC + returns to pre-pandemic production after August. “The expiration of the OPEC + agreement in September created an opportunity, and perhaps (Biden) would not have made such a move unless he was convinced that something was possible,” Alam said. The group will hold the next production gathering in August.
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Still, despite recent losses, Biden’s expectations for more oil could be shattered as rising oil prices have boosted state revenues and economies throughout the Middle East. “It would be a big surprise if Saudi Arabia produced more oil,” said independent analyst Stephen Innes.
Saudi Arabia’s oil-led economy expanded 9.6% in the first quarter, showing the highest growth rate in 10 years. Walid Koudmani, an analyst at XTB, says there is “a great economic incentive not to increase production.” The riad is already approaching its maximum capacity. In May, Saudi Arabia’s Foreign Minister Faisal bin Farhan said the kingdom “did what it could” for the oil market. He argued that the industry needed to increase its refining capacity rather than simply pumping more crude oil.
Iran is another major controversial bone between the United States and Saudi Arabia. Riyadh is leading the battle against the Houthi rebels in Yemen, backed by Tehran. Meanwhile, Washington wants to recover Iran’s nuclear deal abandoned by Biden’s predecessor Donald Trump in 2018. This could lead to the lifting of US sanctions on Iran and could pave the way for OPEC members to return to full export capacity.
Chief negotiators from the United States and Iran held indirect negotiations in Qatar in June to revive the nuclear deal. Analyst Kodomani said the nuclear deal “appeared to be within a few times recently, especially after the conflict between Russia and Ukraine began.” Experts conclude, “If President Biden’s visit is followed by a guarantee (of higher oil production) from Saudi Arabia, the United States will not be able to gain traction and will likely be handed over to the United States.” Attached. – AFP