US President Joe Biden has ordered a major release of oil from America’s strategic reserves in an effort to bring down high fuel costs. The US has been asking Saudi Arabia to increase its oil production, but it has rebuffed previous US requests to boost output in order to reduce oil prices. Saudi Arabia, which is close to Western governments but also to Moscow, is the biggest producer in OPEC, the oil cartel which accounts for about 60% of the crude oil traded internationally. Because of this OPEC has a key role in influencing oil prices.
So far, no OPEC member has agreed to US requests to boost output. Russia is not in OPEC but has been working with it since 2017 to place limits on oil production, in order to maintain earnings for producers. The US is also looking at relaxing Venezuela’s oil sanctions. It used to be a key US oil supplier, but recently Venezuela has largely been selling its oil to China. Oil-rich Gulf monarchies have so far resisted Western pressure to raise output, prioritising their own strategic and economic interests.
Biden last month tried to call Mohammed Bin Salman to ask Saudi Arabia to increase its oil supply, after the US formally banned Russian oil imports, but as relations between the two countries remain frosty, MBS didn’t accept the call. Perhaps MBS remembers that Joseph Biden had promised to make Saudi Arabia “a pariah state” and described it “as a state with no redeeming social value” over the killing of dissident journalist Jamal Khashoggi, and so decided to give Biden the cold shoulder.