President Joe Biden on Friday said he expects further oil supply increases from Saudi Arabia which may help lower U.S. gasoline costs after a meeting with the country’s leaders.
Biden’s trip did not result in a pledge for a rise in production from Saudi Arabia, but US officials said they were confident that the country would lead the OPEC+ alliance to an agreement for a slow increase.
“I’m doing all I can to increase the supply for the United States of America, which I expect to happen,” Biden told reporters. “The Saudis share that urgency. And based on our discussions today, I expect we’ll see further steps in the coming weeks.”
“Saudi Arabia has committed to support global oil market balancing for sustained economic growth,” the White House said in a statement. “These steps and further steps that we anticipate over the coming weeks have and will help stabilize markets considerably.”
Biden met with King Salman bin Abdulaziz and his son, Crown Prince Mohammed Bin Salman, in Jeddah and the visit came after high oil prices forced the president to backtrack on an earlier vow to ostracize Saudi Arabia over the 2018 killing of Washington Post columnist Jamal Khashoggi.
U.S. gasoline prices have fallen slightly in recent weeks but remain near record levels of $5 a gallon.
Biden’s visit to a summit of Arab leaders in Jeddah comes ahead of the Aug. 3 meeting of the Organization of Petroleum Exporting Countries and its allies where the cartel’s output for September and the following months will be decided.
Adel Al-Jubeir, Saudi minister of state for foreign affairs, said supply decisions would be based on ongoing assessments of the market, Bloomberg reported. The minister also said Saudi Arabia would continue to work with OPEC+, the alliance including Russia.
“We assess demand and we work in consultations with other oil producers in OPEC and OPEC+ to make sure that we have adequate supplies,” the Saudi minister told a separate news conference. “We base that on fundamentals, not on speculations, not on hysteria, not on geopolitics.”
Under the terms of the existing OPEC+ agreement, Saudi Arabia’s output is due to reach almost 11 million barrels a day next month, a level it has only rarely maintained. Any further increases would test the country’s maximum sustainable capacity which state-run oil producer Saudi Aramco puts at 12 million barrels a day.
The New York Times on Thursday reported that Martin Indyk, a former diplomat who served in the Clinton and Obama administrations, had said that while exact amounts were uncertain, the Saudis were expected to increase production by around 750,000 barrels a day, with the United Arab Emirates boosting output by 500,000 barrels a day for a combined 1.25 million barrels a day.
Saudi Arabia and the United Arab Emirates are seen as the only OPEC+ members with the spare capacity available to meaningfully raise output, but analysts have questioned how willing they would be to significantly tap into that cushion.
The White House statement also announced a clean-energy partnership between the US and Saudi Arabia, which will include Saudi investments to speed up the transition away from fossil fuels to clean energy. The framework will focus on solar, hydrogen and nuclear, with a mix of public and private-sector involvement.