In two brief sentences, French President Emmanuel Macron told US President Joe Biden and the West about the limits of the type of diplomatic and political spectacle practiced by the US administration vis-à-vis OPEC and OPEC+ countries. , especially those from Saudi Arabia and the UNITED ARAB EMIRATES.
Macron said the UAE had reached the maximum possible level of oil production. He added that what remains of Saudi Arabia’s production capacity is quite limited and certainly not large enough to live up to what Biden dreamed of at least a year ago. This dream actually turned into a nightmare with the outbreak of the war in Ukraine.
The production levels of the major oil countries are not military secrets. Data is recorded almost daily by global markets and international energy organizations. The Saudi production ceiling has been known for years. Under pressure it can be increased by ten percent, but technically this cannot be sustained for too long.
All the hostility, political hesitations and various assertions of the United States are incomprehensible, because they assume something that does not exist: that there are millions of additional barrels of oil that can be pumped daily from the Saudi Arabia and the United Arab Emirates. However, for essentially political reasons, American logic assumes that these two countries are not interested in alleviating the energy supply problems.
Here we are confronted with one of two hypotheses. Either the US President is on another planet and therefore unaware of the capabilities of the major oil nations, or he is maneuvering to ease the political pressure he has been facing at home since the price of a gallon of gasoline approached, then a exceeded $5 a gallon.
The first assumption is not valid, given that even if old Biden had no idea of the energy import data in the world, his administration should. The White House is not a room directed by a single director who determines all the movements himself. That may have been the case for a time during the days of former President Donald Trump, but those days are now over and it’s hard to imagine they could return.
The second hypothesis has to do with trying to blame Saudi Arabia, a country that the current administration has tried to turn into a “pariah”. So why not make it a pariah since it has failed to provide what Americans treasure most: cheap fuel for their cars, trucks and power plants. If you add the image of Russian President Vladimir Putin alongside Saudi Crown Prince Mohammad bin Salman, whom the Biden administration has chosen to initially antagonize, then it’s easy to sell the public on the idea that these two leaders rob American consumers of the happiness of the oil.
The idea that the United States could lose control of oil prices has worried the Biden administration for some time. The OPEC+ arrangements that emerged from the Saudi-Russian deal to adjust OPEC production policies and the OPEC+ membership of non-OPEC countries have sparked discord between the world of producers and consumers. To understand what OPEC+ means, we can look at the Sultanate of Oman’s membership in the organization. It is a country that has so far moved away from all global and regional alliances and patterns in order to enshrine a political culture that has always shaped its policies along an independent path.
But today’s reality has changed.
If the West acts as a consumer cartel whenever it is in its interest and as a production cartel whenever its shale oil production capacity increases, then what will stop the producing countries, for whom the oil rent is a vital economic artery, to regroup in a cartel with the fangs and claws that the status of super-producer gives to Saudi Arabia and Russia.
The United States can only blame itself for having led the producing countries, large and small, on this path.
The war in Ukraine has exposed all possible contradictions. The military battlefield is part of a theater that spans the globe. Energy supplies, then the problems of cereal production, have become the showcase of Western contradictions. There are comical contradictions at play as OPEC+ is called upon to increase production, which means that Russia should increase production while being prevented from selling its oil and gas. The energy chaos of Europe today is the result of such contradictions. But Biden has tried to promote the idea that pressure on Saudi Arabia can solve all problems. That pressure has now given way to begging and a US charm offensive towards Saudi Arabia ahead of the Jeddah regional summit and Biden’s upcoming meeting with Prince Mohammed bin Salman. Then came Macron’s bombshell when the latter told Biden that Saudi Arabia was unable to increase production, even if it wanted to.
The United States is now turning over its old cards and sending signals in favor of the political and economic rehabilitation of countries like Venezuela. And if the nuclear deal were to eventually adjust to Tehran’s terms, Iranian oil could offer the oil market leeway for increased production and lower prices, potentially preventing the next Western economic depression, which could take the world with it.
America’s contradictions are primarily political, as we have seen over the Biden administration’s dealings with Saudi Arabia since taking office.
Biden travels to Saudi Arabia as most of his demands to Riyadh have become moot. When he says he won’t ask Riyadh to increase production, it’s because, as everyone knows, he can’t ask for such a thing in the first place. The upcoming Jeddah summit, which was painted by Washington as an example of how the president was willing to sacrifice his principles of human rights and the promotion of democracy in exchange for a lower price for a gallon of essence, is an argument belied by economics.
Washington must overcome its contradictions in order to find a way out of the next supply crisis, price spikes and fluctuations in imports of all commodities, not to mention wheat imports.
The American approach is loaded with illusions and disconnected from the profound transformations the world is going through, which a tired and elderly leader like Biden, at the end of his political career, can hardly cope with.