HOUSTON — When President Biden meets Crown Prince Mohammed bin Salman in Saudi Arabia, he will be following in the footsteps of presidents like Jimmy Carter, who flew to Tehran in 1977 to exchange toasts with the shah of Iran on New Year’s Eve.
Like the prince, the shah was an unelected monarch with a tarnished human rights record. But Mr. Carter was obliged to celebrate with him for a cause that was of great concern to people back home: cheaper gasoline and secure oil supplies.
As Mr. Carter and other presidents learned, Mr. Biden has precious few tools to bring down costs at the pump, especially when Russia, one of the world’s largest energy producers, has started an unprovoked war against a smaller neighbor. In Mr. Carter’s time, oil supplies that Western countries needed were threatened by revolutions in the Middle East.
During the 2020 campaign, Mr. Biden pledged to turn Saudi Arabia into a “pariah” for the assassination of a prominent dissident, Jamal Khashoggi. But officials said last week that he planned to visit the kingdom this summer. It was just the latest sign that oil has again regained its centrality in geopolitics.
oil prices fell below zero at the start of the pandemic. Big companies like Exxon Mobil, Chevron, BP and Shell have largely stuck to the investment budgets they set last year before Russia invaded Ukraine.
The Russia-Ukraine War and the Global Economy
A far-reaching conflict. Russia’s invasion on Ukraine has had a ripple effect across the globe, adding to the stock market’s woes. The conflict has caused dizzying spikes in gas prices and product shortages, and is pushing Europe to reconsider its reliance on Russian energy sources.
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 Friday, and the national average price for a gallon of regular gasoline was $4.85 on Sunday, according to AAA, more than 20 cents higher than a week earlier and $1.80 above a year ago.
Another Biden administration effort that has appeared to fall flat is a decision to release a million barrels of oil daily from the Strategic Petroleum Reserve. Analysts said it was hard to discern any impact from those releases.
The Biden team has also been in talks with Venezuela and Iran, but progress has been halting.
The administration recently renewed a license that partly exempts Chevron from U.S. sanctions aimed at crippling the oil industry in Venezuela. In March, three administration officials traveled to Caracas to draw President Nicolás Maduro into negotiations with the political opposition.
In another softening of sanctions, Repsol of Spain and Eni of Italy could begin shipping small amounts of oil from Venezuela to Europe in a few weeks, Reuters reported on Sunday.
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.