Oil Price: no potential watershed moment from Biden visit to the Middle East!`
The prices of crude oil dipped slightly on Tuesday with the two major benchmarks remaining relatively static.
At 14:20 GMT, the prices of WTI and Brent were at $109.10 and $110.23 respectively; the price of LNG, liquified natural gas, however, continues to fall despite the political friction against the flow of Russian gas through a web of European pipelines and recorded a fall of 5.3% in the markets at the same time of the day.
The rising fuel prices, meanwhile, trigger off protests from the public, venting their fury at the politicians across the world; the protests by the truck drivers in the United Kingdom blocking motorways is a case in point; some even threatened to extend it, covering London, the capital.
The public anger is rampant in the US and rest of developed nations too over the same issue, although the degree of frustration varies from the continent to continent.
The cost of living crisis is mushrooming in the oil-rich countries in the Middle East too. The UAE, for instance, has decided to allocate billions of dollars to mitigate the impact on the lower income-groups in the emirates; the masses in question have not been immune to the cost of living crises in the rest of the world, despite the ample revenues from oil into the coffers of the emirate.
In short, the cost of living crisis is real regardless of the region you live in, rich or poor.
In the UK, meanwhile, the price of Lurpak butter, the Danish product that is the most popular butter in the UK, is grabbing the headlines in the media, reflecting the rising inflation; although there are cheaper alternatives, they are no match for the star item! That account for its choice for modelling the situation with the perfect sentiment with a culinary spin.
Against this backdrop, analysts anticipate the release of SPRs, strategic petroleum reserves, by the US, the world's top oil consumer in the hope of calming down the markets - once again; it did not do the trick in the past few months, though; in this context, little is there for the consumers to hope for.
The development may be even a harbinger of failure of intended mission of the Biden administration, arriving in the Middle East in a couple of days' time.
Although the goals of President Biden's forthcoming visit to Saudi Arabia are far from clear, the hope for a substantial boost in the supply of crude oil to the markets is fast fading off - perhaps faster than we can pronounce the name of the world's most powerful man.
It will be quite surprising if he does not raise the issue of boosting the oil output by the UAE and Saudi Arabia in his tour; the position of Saudi Arabia and the UAE is clear, if you read between the lines of what President Macron said to President Biden in their latest meeting.
As there are no realistic prospects of the arrival of crude oil from Iran and Venezuela in the near future, President Biden will at least
try his best to get the two Middle Eastern oil superpowers on board in order to achieve his political goals and stay relevant if he choses run again for the presidential election in 2024.
All in all, the Middle Eastern oil producers and President Biden will be compelled to walk the tight rope when they meet up this month.
If the mission fails, there will be serious ramifications for both sides: on one hand, the failure to tame the price of oil at pumps will not reflect very well on President Biden, if he ever dreams of a second term; on the other hand, if the US feels being let down, there will be serious security implications for Saudi Arabia, especially when it is under constant attack by Houthi rebels, backed up its arch-rival in the region, Iran.
In short, the stakes cannot be higher for the old allies when economical factors outweigh the sentiments that stem from long-term loyalties.
