Biden to ask Persian Gulf producers to boost oil output during Middle East trip

(Bloomberg) — President Joe Biden said he’ll ask U.S. allies in the Persian Gulf region to boost oil production when he meets with them during a trip to Saudi Arabia next month, one of the key avenues he has to address surging inflation costs at home. 

“I have indicated to them that I thought they should be increasing production,” Biden said Thursday at a news conference in Madrid following a NATO summit. “I hope we see them in their own interest concluding that makes sense to do. And they have real concerns about what’s going on in Iran and other places in terms of their security.”

Biden said he wouldn’t ask Saudi King Salman or Crown Prince Mohammed Bin Salman directly to boost energy output when he sees them at the July 16 meeting. He said the broader Gulf Cooperation Council forum, a gathering of largely oil-rich countries along the Persian Gulf, is a more appropriate setting for that request. 

“That’s not the purpose of the trip” to Saudi Arabia, Biden said. 

Oil fell after Biden’s comments, with West Texas Intermediate futures sinking 2.3% to $107.31 a barrel as of 10:05 a.m. New York time.

The trip to Saudi Arabia puts Biden -- who vowed during his campaign to make Saudi Arabia a “pariah” over its human rights record -- in an awkward position. Soon after taking office, his administration released a report blaming the crown prince for the 2018 killing of Washington Post columnist -- and US resident -- Jamal Khashoggi. 

The prince has denied he had any involvement in the killing, while accepting symbolic responsibility for it as the country’s de facto ruler.

Biden and his top aides have repeatedly said that his Mideast trip is about more than energy -- he cited concern about the war in Yemen, among other issues -- but the surge in gasoline prices in the US has added pressure on the president and Democrats heading into the November mid-term elections. In Madrid, Biden reiterated his view that the price increase is entirely due to “Russia, Russia, Russia” as a result of the war in Ukraine. 

Biden said he sees a number of ways to alleviate some of those increases, including through a temporary repeal of the federal gas tax, a measure that would need congressional approval. But he also said that Americans may have to continue enduring higher-than-usual gas prices for a time.