30% jump in oil prices pose threat to Biden's chances for re-election
3 Min Read
Even though it remains a possibility that Saudi Arabia would still want to bring Trump back into the scene, its decision to join BRICS insinuates that it could be shying away from relations with the US overall.
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A man stands under American and Saudi Arabian flags prior to a visit by US President Joe Biden, at a square in Jeddah, Saudi Arabia, on Thursday, July 14, 2022 (AP)
After surging 30% since June, the price of oil is bound to reach $100 a barrel this month for the first time this year as prices will still remain lower than those witnessed in light of the war in Ukraine. However, that could play a major role in how the US elections will play out next year.
Despite the fact that the world is enduring slow growth, sufficient demand to keep oil markets tight remains present, but it is the joint agreement by Saudi Arabia and Russia to push oil to $100 a barrel is what's driving the surge.
The Kremlin confirmed earlier this month that a phone call had occurred between Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman, stressing that deals regarding supply cuts reinstated stability in global energy markets.
The day prior, both nations, which are global leaders in oil production declared an extension to voluntary oil supply cuts until the end of the year.
Research shows that high oil prices pose major effects on voting in the US, namely in states or areas where residents depend highly on transportation by car.
This indicates no surprise that Saudi Arabia is being persuaded by the US to bring down prices. For instance, during the 2012 elections, oil prices dropped to almost $86 a barrel, as opposed to the $103 in April that year.
However, US-Saudi relations under the Biden administration have hit an all-time low, catalyzed by Mohammed bin Salman’s decision to join BRICS+.
Read more: Saudi Arabia imports Russian oil, sends its own supplies to EU
Meanwhile, the report says Putin saw an ally in former US President Donald Trump rather than one in Biden. Even if the war were to be ended, Russia would still prefer a president open to negotiations rather than one opposed to it.
Even though it remains a possibility that Saudi Arabia would still want to bring Trump back into the scene, its decision to join BRICS insinuates that it could be shying away from relations with the US overall.
As of now, with the US petroleum reserve being at its lowest level since 1983, there aren't that many chances. The rise in oil prices would mean an increase in interest rates before the elections.
Back in October last year, the 13-nation OPEC+ and its 10 allies infuriated the White House by resolving to cut output by two million barrels per day beginning in November, fueling fears that oil prices may spike.
"I'm not going to get into what I'd consider and what I have in mind. But there will be -- there will be consequences," Biden told CNN, saying he wouldn't specify which choices were being evaluated, although the White House had previously stated that Biden was reassessing connections between allies.
