OPEC+ agreed to a tiny oil output hike of 100,000 b/d for Sept, sending Brent back above $100 a barrel.
The increase (the 2nd smallest hike in the cartel's history, only behind one in 1986) comes despite President Biden's trip to Saudi Arabia | #OOTT 1/4 https://t.co/3KO9hcdQU0
— Javier Blas (@JavierBlas) August 3, 2022
Saudi Arabia is one of the original founders of OPEC, and they wield heavy influence over the OPEC and OPEC Plus nations. The entire point of Biden’s trip to the kingdom was to secure Saudi support for a large increase in production to help offset the global oil supply crunch that has driven up prices. Instead of getting a production boost of around half a million barrels a day, the president ended up with just 100,000, a massive reduction compared to the expectation. For context, the United States uses about 21 million barrels of oil a day, making a global increase of 100,000 a day nothing but a rounding error.
The OPEC+ increase isn't real, either, as most member are already pumping at their maximum capacity. Only Saudi Arabia and the UAE can increase. If they adhere to their quotas, the 100,000 b/d translates in an extra 26,000 b/d for Riyadh and 8,000 b/d for Abu Dhabi | #OOTT 3/4
— Javier Blas (@JavierBlas) August 3, 2022
That is what total failure looks like. The President of the United States went to the Middle East to beg a country he had previously tried to make a “pariah” for oil. Why? Because Biden’s own domestic energy policies have been so disastrous. The president then returned with no actual agreement, choosing bluster over substance. Now, the results of that are in, and the Saudis aren’t even pretending to have played along. It’s yet another embarrassment for Biden and the nation.