World

The West has to bite its lip for Saudi oil

16 March 2022

10:11 PM

16 March 2022

10:11 PM

It would be ridiculous to claim that Boris Johnson’s visit to Saudi Arabia is not morally problematic. He is going to a country which held a mass execution for 81 people this weekend – a record number – and to visit a man who US intelligence blames for the brutal murder of the journalist Jamal Khashoggi. Yet, if the West wishes to reduce Vladimir Putin’s leverage – and stabilise the oil market – then it needs Saudi Arabia to pump more; no country has more spare capacity than Saudi Arabia, which could produce another 1.5 to 2 million barrels a day if it wanted to.

China’s struggles with Covid, and the expectation that further lockdowns there are nigh-on-inevitable, has led to the oil market coming off its recent high: the price of a barrel of oil is now back below $100 a barrel. This means that there is less immediate pressure on Johnson to get the Saudis to start pumping straight away. Indeed, many in government think that it will be a long process to persuade Riyadh to do so. Saudi-US relations are as bad as they have ever been – Joe Biden has, to date, refused to deal with Mohammed bin Salman because of the Khashoggi murder – and MBS appears to be enjoying this moment of leverage.


MBS should be careful, though. Saudi Arabia has the chance here to re-establish itself as the West’s indispensable interlocutor on the oil market. But if a sense grows that the kingdom isn’t interested in helping, then attention will turn elsewhere. This could be bad for Riyadh. The Saudis are already angry that too much is being offered to Iran in the nuclear negotiations in Vienna. But if the Saudis aren’t going to produce more oil, an argument will be made for striking a quick nuclear deal with Tehran so that their oil can return to the global market. However, if Saudi Arabia is producing more, and the price has stabilised at a lower level, the US will be more inclined to stick to their positions in the talks.

In the medium term, the best solution is – obviously – for the West to develop its own energy resources. A mix of nuclear and renewables would reduce the relevance of the Russians, the Saudis, the Iranians and the Venezuelans on the world stage, which would be all to the good. This, though, will take time and until that has been achieved it will be a matter of picking the lesser of two evils and at the moment that is persuading the Saudis to pump more.

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