NYT: Biden has "only bad options" for bringing down oil prices

The US president’s trip to Saudi Arabia is unlikely to reduce oil and gasoline prices, and it is not clear that anything else he might do would work, either.

The United States is the world’s biggest oil and natural gas producer, but it accounts for only about 12 percent of the global petroleum supply. The price of oil, the principal cost in gasoline, can still shoot up or tumble depending on events halfway around the world, The New York Times reports.

Always looking ahead to the next election when their jobs or their party’s hold on power is at stake, presidents can find it impossible not to try to cajole or plead with foreign and domestic oil producers to drill and pump more oil, faster.

“A president has to try,” said Bill Richardson, an energy secretary in the Clinton administration. “Unfortunately, there are only bad options. And any alternative options are probably worse than asking the Saudis to increase production.”

Two other oil-producing countries that could increase production — Iran and Venezuela — are U.S. adversaries that Western sanctions have largely cut out of the global market. Striking any deal with their leaders without securing major concessions on issues like nuclear enrichment and democratic reforms would be politically perilous for Mr. Biden.

Energy experts said even Saudi Arabia, which is widely considered to have the most spare production capacity ready to be put to use, could not bring down prices quickly on its own. That’s because Russian output is sliding and could fall much further as European countries reduce their purchases from the country.

Energy traders have become so convinced that the supply will remain limited that the prices of the U.S. and global oil benchmarks climbed after news broke that Mr. Biden was planning to travel to Saudi Arabia. Oil prices rose to about $120 a barrel on June 3.

The Biden team has also been in talks with Venezuela and Iran, but progress has been halting.

Venezuela, once a major exporter to the United States, has the world’s largest petroleum reserves. But its oil industry has been so crippled that it could take months or even years for the country to substantially increase exports.

With Iran, Mr. Biden is seeking to revive a 2015 nuclear accord that President Donald J. Trump pulled out of. A deal could free Iran to export more than 500,000 barrels of oil a day, easing the global supply crunch and making up for some of the barrels that Russia is not selling. Iran also has roughly 100 million barrels in storage, which could potentially be released quickly.