The price of oil surged to more than $100 a barrel on Monday after President Joe Biden left Saudi Arabia over the weekend without winning a commitment from the kingdom to boost output.
Brent crude, the international benchmark, rose by nearly 2.5% to around $103.50 in the early morning hours of Monday while West Texas Intermediate, the US benchmark, also spiked nearly 2% to more than $99 a barrel.
The prices shot up on Monday following comments by Saudi Foreign Minister Prince Faisal bin Farhan Al Saud, who said that the topic of OPEC+ boosting oil supply wasn’t even raised during a summit meeting between Biden and other Arab leaders.
“Traders got one clear message from Biden’s recent visit to Saudi Arabia, during which President Biden spoke to a number of Arab leaders,” market analyst Naeem Aslam told Guardian.
“The message is that it is OPEC+ that makes the oil supply decision, and the cartel isn’t remotely interested in what Biden is trying to achieve,” Aslam said.
“OPEC+ will continue to control oil supply, and one country alone cannot determine the oil supply — at least that is the message that traders have taken from Biden’s visit to Saudi Arabia.”
Biden said on Friday that the Saudis shared his “urgency” to boost supply and that he expects the kingdom to take “further steps in the coming weeks” toward that goal.
But Saudi officials said that any decision on boosting output would need to be made within the framework of OPEC+, the cartel of petroleum-producing nations that will hold its next meeting on Aug. 3.
Administration officials played down expectations for any immediate increases in Saudi oil production, which could help alleviate high gas prices that are politically damaging to Biden back home.
One member of OPEC+ is Russia, the world’s second-largest producer of oil. The Americans have been seeking to cut off Russian energy from global markets as punishment for President Vladimir Putin’s decision to invade Ukraine.
While the Europeans are set to transition away from Russian oil and natural gas, the Saudis have balked at isolating the Kremlin.
Biden has come under fire from many of his own supporters for meeting with the Saudi de-factor ruler, Crown Prince Mohammed bin-Salman, who has been implicated in the murder of Washington Post columnist Jamal Khashoggi.
But the soaring gas prices and red-hot levels of inflation forced the president to abandon a campaign pledge to treat bin-Salman as a “pariah.”
“I’m doing all I can to increase the supply for the United States of America, which I expect to happen,” Biden said on Friday.
“The Saudis share that urgency. And based on our discussions today, I expect we’ll see further steps in the coming weeks.”
While gas prices reached record highs a month ago nationwide, they have fallen consistently in recent weeks as demand drops due to fears of a recession.
The average price of a gallon of regular unleaded fuel in the US stood at $4.52 on Monday — down from $4.99 a gallon a month ago, according to AAA.
The current OPEC+ agreement expires in September, opening the door to potentially higher production after that, although questions remain about how much excess capacity the Saudis have.
“We listen to our partners and friends from all over the world especially consumer countries,” Prince Faisal told reporters.
“But at the end of the day, OPEC+ follows the market situation and will supply energy as needed.”