Could additional Saudi gas production cut gasoline theft rates in US?
Could additional Saudi gas production cut gasoline theft rates in US?
High prices of oil driven by the Russian-Ukrainian conflict caused a severe crisis of gasoline and diesel across the United States, giving rise to gasoline thefts in the country since March. The problem was one of the reasons that pushed US President Joe Biden to head to Jeddah with an eye for more Saudi oil production, in an attempt to balance global fuel prices and help ease his country’s problem.
A question mark hangs over whether Biden’s visit to the Kingdom could help reduce gasoline prices and consequently curb the theft rate, which has been increasing since March as a repercussion of the conflict in Ukraine and EU/US economic sanctions on Russia.
A few days ago, thieves in Colorado stole gasoline from a semitruck’s fuel tank. The theft was revealed after residents in the Bear Creek area smelled gasoline that leaked after the thieves made a hole in the tank, Newsweek reported on July 11. Last month, the Virginia Beach Police Department arrested two men for selling gasoline at low prices on the black market after they stole it from a closed Citgo gas station, CNN reported on June 18.
It was also reported by several local news outlets that some thieves modified vehicles to get more gasoline from the gas station to then re-sell on the black market for thousands of dollars in Nevada, NBC12 reported.
In just over one month, the price of gasoline hiked to about $5 per gallon, while the average price until July 18 reached $4.521 per gallon after it had reached $4.986 per gallon on June 10, according to the American Automobile Association (AAA).
For Biden, the crisis that hit his country could be eased, as the prices may go down in “the next couple of weeks” after Saudi Arabia pledged to increase its oil output, as the US president stated on July 16 in comments to reporters in Jeddah, where he attended the Development and Security Summit between the GCC countries, Egypt, Jordan and Iraq.
In his speech at the Jeddah Summit, Saudi Crown Prince Mohammed Bin Salman announced that his country would increase oil production to 13 million barrels a day, but affirmed that his country does not have the capacity for an additional increase. The Kingdom’s current oil production is 10.5 million barrels a day.
However, Brahma Chellaney, a natural-resources geostrategist and professor of strategic studies at the Center for Policy Research in New Delhi, sees the opposite, as he is of the belief that increasing Saudi oil production would not be effective enough to solve the problem, but rather, the solution boils down to the US energy export sector, as it is the main reason behind the gasoline price surge.
“Biden's pilgrimage to Saudi Arabia was justified on grounds that he wants to bring down the US price at the pump. But the soaring prices of gasoline, diesel and natural gas in the US are due to rising US energy exports, with Biden reluctant to limit US exporters' profits bonanza,” Chellaney said on Twitter.
He added that the American and European sanctions on Russia is main reason behind the hike in oil prices, which made tremendous profits for energy exporters, noting that Biden is reluctant to impose a ban on energy exports.
<blockquote class="twitter-tweet"><p lang="en" dir="ltr">Biden's pilgrimage to Saudi Arabia was justified on grounds that he wants to bring down the US price at the pump. But the soaring prices of gasoline, diesel and natural gas in the US are due to rising US energy exports, with Biden reluctant to limit US exporters' profits bonanza.</p>— Brahma Chellaney (@Chellaney) <a href="https://twitter.com/Chellaney/status/1549055019130839040?ref_src=twsrc%5Etfw">July 18, 2022</a></blockquote> <script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
US energy exports boomed over the first 17 days of July to an average of 1.35 million barrels of diesel fuel per day, according to recent data issued by the energy analytics firm Vortexa, the Washington Examiner reported on July 18. US oil exports are mainly going to Latin American countries, where leaders have had to increase their demand of US oil in order to confront violence and chaos caused by diesel shortages.
