This is because Saudi Arabia possesses the second-largest oil reserves in the world, and the United States has made it quite plain that it wants all of the oil states in the Persian Gulf to increase their production. It is generally accepted that higher oil production will result in lower prices at the pump for gasoline.
In practice, things are much more convoluted.
It is difficult for Saudi Arabia to reach its own production goals, thus the country does not have a significant surplus of oil to give away. The release of any additional oil would necessitate the kingdom to reach an agreement with the other members of the OPEC+ coalition.
According to Paul Sankey, lead analyst at Sankey Research, a research organization, “there is no way to visit Saudi Arabia without it having in some form of tie to oil.” “However, given the circumstances of this situation, it does not appear that there is much that can be done.”
Even if Saudi Arabia were to flood the world market with additional oil, there is no assurance that this would result in a decrease in the price of gasoline. According to Ben Cahill, a senior scholar at the Center for Strategic and International Studies, the fluctuation in oil prices over the past few weeks has little to do with supply disruptions. This is the reason for the volatility in oil prices.
The invasion of Ukraine by Russia has thrown the global oil markets into disarray because of the uncertainty it has produced.
According to Cahill, “a significant portion of the price run-up is related to geopolitics and financial speculation.” “If you look at the physical market, which is the actual demand and trading of the physical barrels of petroleum, there isn’t any disturbance whatsoever,” said one analyst. “[T]here is no disruption everywhere.”
Then why are you going?
The concept that the president’s trip is intended to drive down the price of fuel has been downplayed by the president. Vice President Biden told reporters a month ago that the president will not directly push Saudi leaders to increase oil production.
However, Cahill claims that the president does not have many choices open to cope with the rapidly rising cost of gasoline. According to AAA, the national average price of a gallon of gasoline is currently $4.678, which is a decrease from the more than $5 that it was just one month ago. One of these options is to seek assistance from OPEC.
According to what he had to say, “it won’t have an immediate impact; but, this kind of discussion between Washington and Riyadh is good, and it should be encouraged.”
However, Cahill stated that the trip itself most likely has more to do with concerns of regional security than it does with oil output.
As a candidate for president, Joe Biden committed label Saudi Arabia a “pariah state” following the conclusion of an intelligence report from the United States that Saudi Crown Prince Mohammed bin Salman was responsible for the murder and dismemberment of journalist Jamal Khashoggi of the Washington Post.
Biden, though, defended his travel by claiming that it is necessary for the security interests of the United States in an opinion piece that was published this weekend in the Washington Post. According to what he had said, the region is “important to global trade and the supply chains we rely on,”, especially in light of the sanctions that have been placed on Russia as a consequence of its invasion of Ukraine.
According to Atlas Public Policy, an organization that serves as an advisory group for electric vehicle manufacturers, automakers are continuing to invest billions of dollars in electric vehicles, and as of this month, the industry has announced a staggering 120,000 EV manufacturing jobs across the country.
A story to be learned from
According to what Corbin Hair and Carlos Anchondo have written, the prospects for carbon capture and storage have likely never been more positive. This is because both Congress and the Supreme Court have recently made decisions that are favorable to the industry.
However, a carbon system that cost $1 billion and was once the largest in the world provides insight into the economics and politics of carbon capture technology, as well as its limitations. This system has since been shut down. You can read the story right here.
According to what Scott Streater has written, the government of Vice President Joe Biden may press on with a massive oil and gas project in the Arctic, a move that environmentalists have criticized as compromising the president’s objective about the environment.
The Department of the Interior has just published a new environmental analysis that paves the way for a scaled-down version of the contentious project. According to the report, two of the five planned drill sites will be eliminated to protect vital habitats for polar bears, migrating waterfowl, and herds of caribou.
It is easy to feel disconnected from the science, policy, and politics that are driving the energy transformation. But on both an individual and a societal level, we are all impacted, whether it is through hotter days and greater gas prices or increased home insurance rates and food availability.