Page 5 - NorthAmOil Week 28 2022

NorthAmOil COMMENTARY NorthAmOil

to tankers headed for export markets. need more production from the US, Canada,
Its policy was reversed just a few weeks later Mexico and Brazil, and then there’s the whole
with WTI dropping to $37 per barrel on April 20 downstream sector to talk about.”
with the supply hike coinciding with the spread With Biden having taken a firm stance against
of the coronavirus (COVID-19) pandemic. Led the leadership of a key ‘ally’, there are rumours
by Saudi and Russia, OPEC+ then restricted pro- that the House of Saud sees little reason to bend
duction levels and slashed spending to shelter to his wishes.
their economies.
Not seeing eye to eye
Once bitten, twice shy As promised, Biden pressed Crown Prince
Governments throughout Europe and North Mohammed bin Salman (MbS) on human rights
America have watched in frustration as the hold- issues. This was a particularly important element
ers of ‘spare capacity’ – predominantly Saudi and in proceedings given that Biden had pledged to
the UAE – have rebuffed calls to raise output. make the Kingdom a “pariah” owing to the mur-
Efforts to influence Saudi Arabian and Emi- der in 2018 of journalist Jamal Khashoggi.
rati oil policy show a significant underestima- According to Saudi Minister of State for
tion of the importance these states – and their Foreign Affairs, Adel al-Jubeir: “The Presi-
economies – place in the OPEC+ deal and while dent raised the issue ... And the Crown Prince
conflict in Ukraine has seen many gas importers responded that this was a painful episode for
turn their back on Russia, that country’s role in Saudi Arabia and that it was a terrible mistake.”
oil market stability is a different matter. He told Reuters that those accused of the kill-
Meanwhile, just as they remain keen to con- ing have been punished with prison sentences,
tinue restrained oil market management, Saudi, and noted that the US should be cautious in its
the UAE and, to a lesser extent, Iraq, are hesitant approach to cultural nuance.
to be maxing out oil capacity. Jubeir said that MbS told Biden: “It has not
Speaking to Bloomberg, Joe McGonigle, worked when the US tried to impose values on
Secretary General of the International Energy Afghanistan and Iraq. In fact, it backfired […]
Forum (IEF), said that while Saudi has an addi- Countries have different values and those values
tional 2mn bpd in reserve, to use this would be should be respected!”
“threading a needle […] because you don’t nec- While the ‘fist pump’ deemed to be a sign
essarily want to give up all that spare capacity” in of friendship between the two leaders suggests
case of an emergency, noting that the US Strate- that bridges are being rebuilt, there is clearly still
gic Petroleum Reserve (SPR) and others around some distance between them. Reports suggest
the world have been “diluted”. that US efforts to re-engage were only stoked
He added: “The bottom line is: we need more up by Riyadh cosying up to China. The coming
energy from all sources, not just oil. We need nat- weeks and months will tell whether the meeting
ural gas, and everybody has a role to play – we has borne fruit or not.™

Week 28 15•July•2022 www. NEWSBASE .com P5