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Does Saudi Arabia hold the key to lower energy prices?

Boris Johnson will travel to Saudi Arabia and the Gulf states for talks later this week as the UK tries to cut off Russian oil and gas supplies.

The PM will discuss the possibility of an increase in oil production, although Downing Street officials insist the trip “has not been finalized or confirmed”, reports Sky News. Reports of Johnson’s trip come after the following oil price rise Russia Invades Ukraine.

Fuel price reached “record levels” in the UK of up to £1.60 a liter for petrol and £1.70 for diesel, prompting Conservative supporters to call on Johnson to “intervene” and “urd the Saudis to save money” produce more oil,” the broadcaster said.

Other European nations that are more dependent on Russian gas also plan to reduce energy imports from the sanctioned country. For example, Russian imports account for 65% of natural gas in Germany, compared with just under 4% in the UK.

At a summit last week, European Commission President Ursula von der Leyen proposed 2027 as a “solid end date” for dependence on Russian gas, oil and coal imports for EU, but national leaders have so far ‘balked’ in agreeing a specific date and instead asked the commission to come up with a plan by May, reports Politico.

The importance of Russia’s energy imports is such that they remain unpunished despite a host of other economic measures against Ukraine’s aggressor.

“Even before Russia invaded Ukraine, oil prices were high. DW. The news site explained that as the world continued to slowly recover from the Covid-19 pandemic, “higher-than-expected demand met sluggish supply from manufacturers”. Now, the war in Ukraine is pushing prices even higher.

Higher prices benefit Russia and negatively impact Western economies, making the search for other energy sources and other ways to combat rising energy prices “even more urgent.”

Solution of Saudi Arabia

As the world’s largest crude oil producer, Saudi Arabia could be “part of the answer” to the energy conundrum facing the West, DW said. The country and the neighboring United Arab Emirates (UAE) are “the only two major oil producers that can increase spare production with relative ease.”

But that doesn’t mean Saudi oil can “quickly displace Russian supply,” said Karen Young, founding director of the Energy and Economics Program at the Middle East Institute, based in Washington. Washington, said. “Increasing production does not mean increasing direct exports to Europe,” she told DW. “The oil market is not so easily navigated.”

But by producing more oil, Saudi Arabia could drive down global market prices, she explained.

However, the Organization of the Petroleum Exporting Countries, of which Saudi Arabia is a member, has a “longstanding policy of not changing production or supply on the basis of geopolitical events,” Hasan said. Alhasan, a researcher on Middle East policy said. for the International Institute for Strategic Studies in London.

“They only change in response to changes in market fundamentals,” he said.

A moral compromise

It is hoped Johnson’s “personal relationship” with Saudi Crown Prince Mohammed bin Salman, the de facto ruler of Saudi Arabia, can be used to open doors for the nations. Gulf to increase oil and gas production, say Time.

The main minisiter was “touted as a mediator”, said walkie talkieafter US President Joe Biden publicly criticized Saudi Arabia as a “pariah” country, following the journalist’s murder Jamal Khashoggi at the Saudi consulate in Istanbul in 2018.

It is true that “no other G7 country has a better bond with the crown prince”, says Time columnist James Forsyth. But the relationship “certainly involves questionable moral compromises,” he continued.

The UK justifies its relationship with Saudi Arabia “despite their fearsome record of human rights and its role in spreading Salafist Islamic ideology ‘on the basis that ‘we cannot have the kingdom as an ally, that its friendship is essential to economic stability’. But if the British government can’t convince Riyadh to calm the oil market, “the whole issue of the relationship will be called into question,” Forsyth continued.

Health Secretary Sajid Javid was forced to deny that the UK was “turning a blind eye to the evils of the world to keep the lights on”, as suggested by Sky News presenter Kay Burley in an interview. question last weekend.

And reports of Johnson’s intended visit come as it was reported that Saudi Arabia had executed 81 people on Saturday, for reasons including terrorism, murder and holding “false beliefs”. “, The Telegraph reported.

Javid said that under the three Tory prime ministers, the government “has always had a very frank and frank relationship with Saudi Arabia”.

He continued: “Wherever there is a human rights issue, we raise it with them and we can do it because we have this relationship. But we also have an economic relationship with Saudi Arabia, we’re not directly dependent on their oil as a country, but energy prices and energy accessibility are a hugely important issue.

“So I’m glad we can have this relationship with Saudi Arabia, where we can talk about human rights issues as well as our long-term economic relationship.”

https://www.theweek.co.uk/news/uk-news/956083/saudi-arabia-oil-prices Does Saudi Arabia hold the key to lower energy prices?

Fry Electronics Team

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