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After the Ukraine-Russia war led to piles of sanctions against the Russian economy, oil prices have increased drastically, putting added pressure on global inflation. Now, OPEC+ is opening its oil taps to boost supply. The boost is still somewhat small, though, around 0.4% of the global demand over July and August.
In response to the announcement, oil prices fell slightly, but prices settled a little over 1% higher compared to the previous day as demand continues to outstrip supply.
In terms of alleviating the oil shortage, the US is also turning to Saudi Arabia. According to anonymous administration officials, Biden will travel there later this month to rebuild relations with the oil-rich country. This is the same country he said in 2019 that the US would turn into a “pariah” after the assassination of political dissident and journalist Jamal Khashoggi.
This comes after the White House praised the crown prince and King Salman for extending a ceasefire in Yemen on Thursday. “This truce would not be possible without the cooperative diplomacy from across the region,” said White House press secretary Karine Jean-Pierre. “We specifically recognize the leadership of King Salman and the crown prince of Saudi Arabia in helping consolidate the truce," she said.
“The frost is melting in Saudi-US diplomatic relations, but it will take more progress before full normalization,” said Bill Farren-Price, the director at an intelligence research firm. “Whether the US will be able to drive a wedge between Riyadh and Moscow is a bigger challenge.”
“The United States welcomes the important decision from OPEC+ today to increase supply,” said White House press secretary Karine Jean-Pierre in a statement. “We recognize the role of Saudi Arabia as the chair of OPEC+ and its largest producer in achieving this consensus.”