Political spin can be a wonder to behold, especially when at least a few of the accomplishments of a presidential trip are debatable. To some, the absence of a handshake between President Biden and Saudi Crown Prince Mohammed bin Salman would suggest the kingdom’s effective ruler was still being treated as a “pariah.” But the Washington Post, for which the murdered journalist Jamal Khashoggi wrote opinion pieces, was outraged, treating the fist bump the two exchanged as a gesture of reconciliation to be condemned, even though others earlier had argued that such a greeting itself was insulting.
The current received wisdom is that Biden’s Saudi Arabia visit, which followed on trips to Israel and the West Bank, was a success, despite additional reports of a clash of views on Khashoggi and human rights when the two men sat down for talks.
But, define success. It apparently doesn’t include Saudi help on oil, a factor in U.S. inflation which, if not tackled, could be catastrophically disastrous for the Democratic Party in this fall’s midterm elections. Amos Hochstein, the president’s adviser on energy security who was sitting in the delegation in Jeddah, was asked yesterday on CBS’s “Face the Nation” about the accomplishments of the trip. He listed its historic nature, the direct flight of Air Force One from Israel to the kingdom, the opening of Saudi airspace to all, the ceasefire in Yemen, agreements on food security, before the interviewer interrupted to ask, “And what about oil?”
Hochstein evaded any admission of failure by referring to Saudi oil production already “increasing by 50 percent” in the past couple of months. It was an obscure point about a quota increase that had been brought forward, rather than actual output going up by half, but it got him out of a corner. He said there would be a “few more steps in coming weeks.”
Over on CNN, Jared Bernstein, a member of the President’s Council of Economic Advisers, was asked whether the visit achieved anything. He replied: “We saw Saudi Arabia say that it would increase its capacity for oil production, and I refer you to them for more information on that.”
The information from the Saudi side is that the kingdom aims to increase capacity to 13 million barrels per day by 2027. Don’t get too excited too quickly. As I wrote in an analysis on July 14 for the Washington Institute for Near East Policy, current Saudi oil production is about 10.5 million b/d, with another 1 million contributed by gas liquids, which are near oil. On top of that, Saudi spare capacity is estimated by well-informed experts as around 1.5 million (although how quickly the kingdom can get that flowing and for how long is debatable). In other words, Saudi Arabia already has 13 million b/d capacity; it just isn’t using it. And 2027? Five years is an awfully long time to wait.
A further reminder/clarification of Saudi oil policy came from Adel al-Jubeir, the minister of state for foreign affairs, who told the media in Jeddah of “the kingdom’s longstanding policy of working to ensure that there is adequate supply of crude oil on the markets.” Defining “adequate” is what the issue is all about. Past Saudi references to “reasonably priced” oil are no longer used. As students of Economics 101 will recall, supply and demand are always balanced by price, and Saudi ideas of a suitable price are higher than ours.
If there is good news on oil, it isn’t because of Saudi policy. The price has already slipped in the past couple of months from around $120 per barrel to about $100, apparently as a consequence of fears of an inflation-induced recession, particularly in China. On CBS, Hochstein spoke of gasoline prices coming down to around $4 per gallon, noting that in some places in the U.S. it is already below that.
The president’s adviser then switched the conversation to climate change, and the bill that Sen. Joe Manchin (D-W.Va.) doesn’t want to support. It was, he said, about investing “in the future” and whether we want “the U.S. to lead or the Chinese to lead us.”
That’s fighting talk, and a reminder of the adage that all politics are local, i.e., domestic. Despite a shift of focus, the Biden trip to the Middle East does represent a range of possible other non-oil diplomatic advances. These will need to be worked on in coming months, but without presidential involvement.
Simon Henderson is the Baker Fellow and director of the Bernstein Program on Gulf and Energy Policy at the Washington Institute for Near East Policy. Follow him on Twitter @shendersongulf.