Oil price increases drove US inflation to its greatest level in years, even before Russia attacked Ukraine.
Domestic crude oil prices have now risen to over $130 per barrel and are over $4 per gallon.
Joe Biden has once again turned to plead with his erstwhile adversaries for assistance in resolving this costly problem.
So Many Reasons Not to Help
According to Axios, the first country on Biden’s itinerary to negotiate a visit was Saudi Arabia.
According to Hans Nichols, the president’s aides consider a possible trip to “heal relations” with the Middle Eastern country and “persuade the kingdom to produce more oil.”
Caving to western consumer demand for cheap energy has never been in Saudi Arabia’s political and financial interest. Biden squandered any remaining goodwill toward his presidency.
The reason Biden shouldn’t go to Saudi Arabia is named Jared Kushner, who is burning up the phone lines with his bestie MBS to keep Saudi production tight.
— Rick Wilson (@TheRickWilson) March 7, 2022
Biden wasted his first year in office, destroying Trump’s diplomatic goodwill with Saudi Arabia. While running for office, he attacked Saudi Arabia to garner some lefty street cred among Jamal Khashoggi’s legacy media allies.
This did not lead to any significant penalties for the Saudis, but it did cause them consternation. Biden is now pleading with the prince to commit political death, even though he does not influence him.
Like other young reformers squaring off against radical Islamists in the region, MBS is also an informed absolutist.
To be a success, he needs to be able to sell a lot of oil, which makes up three-quarters of the national budget.
Oh great. Lets' continue to restrict our own oil production and then go to Saudi Arabia to beg them to produce more. https://t.co/rG1jiBhwPD
— Brit Hume (@brithume) March 6, 2022
MBS may be a despotic ruler who murdered Khashoggi in cold blood.
Still, he is also a reasonably secular patriot at heart, eager to purify his country of extremist Wahabbism and bring it into the twenty-first century.
As with all utilitarians, MBS appears to believe all of the imprisoning of dissidents and concentration of power is necessary for the bottom line.
For MBS, that is Vision 2030, his strategy to invest the nation’s oil revenues’ most valuable company in assets that will indefinitely diversify the Saudi economy in preparation for a post-oil world.
Because OPEC now has more control over the oil market than the Saudis could have ever dreamed of, why would MBS want to limit his own career-defining income?
Saudi Arabia, a founding member of OPEC, spent most of 2020 in a standoff with Russia, attempting to constrain global oil production and counteract the pandemic’s demand fall.
Russia currently accounts for 7% of world oil exports and 7% of American imported oil.
Prices will remain exorbitantly high as long as America continues to purchase from Russia. They will increase even further if the United States ultimately relents and implements a ban. Saudi Arabia becomes considerably wealthier in either case.
Saudi Arabia established itself as a critical diplomatic partner in the Trump administration’s effort to rebalance Middle Eastern influence away from Iran and toward the Abraham Accords’ peace proposals.
On the political front, MBS demonstrated a willingness to cooperate. However, with the highest profit margins on record on the line, Saudi Arabia has no motivation to bail anybody out.