Emmanuel Macron has been caught telling Joe Biden that their Middle Eastern allies cannot increase oil production as the EU tries to replace Russian crude that it has vowed to ban by the end of the year.
The French President, speaking to his US counterpart on the sidelines of the G7 summit in Germany on Monday evening, warned the UAE and Saudi Arabia are close to capacity and are unable to make up the shortfall.
His words will raise fears that shortages which have led to high petrol and energy costs may be here to stay, and may get worse as Europe’s ban on most Russian oil products kicks in by the end of the year – with gas sanctions to follow.
Macron was caught on camera warning Biden that the UAE and Saudi Arabia are unable to fill quotas of Russia oil that will be banned from the EU this winter
French president was interrupted by US national security adviser Jake Sullivan (right), who advised the men to move away from nearby cameras
Macron may have been pressing Biden to increase US output – something he has been reluctant to do under pressure from environmental groups – as a way to relieve the shortage.
However, it is unclear from the short audio clip which was cut off when US national security adviser Jake Sullivan cut across the two men to suggest they continue the conversation inside due to nearby cameras.
In the footage, Macron can be heard saying ‘I had a call with MbZ,’ which is shorthand for UAE leader Sheikh Mohammed bin Zayed al-Nahyan.
‘He told me two things,’ the French president continued. ‘I’m at a maximum, maximum (production capacity). This is what he claims.
‘And then he said (the) Saudis can increase by 150 (thousands barrels per day). Maybe a little bit more, but they don’t have huge capacities before six months’ time.’
Sullivan then interrupted the two men, telling them: ‘Careful. Maybe we should just step inside … because of the cameras.’
Europe is looking for ways to replace some 2million barrels of oil that it buys per day from Russia, as the continent sanctions Putin’s regime over the war in Ukraine.
The EU will ban all Russian oil imports by sea (file image) and most by pipeline by the end of the year, and is scrambling to replace around 2million barrels per day
It comes after Ursula Von Der Leyen, the EU commissioner, announced earlier this month that the bloc will ban 90 per cent of Russian oil imports by the year end.
All seagoing imports of Russian oil and petroleum products will be cut off, with only a partial exemption for oil coming via pipeline.
The concession ensured the support of countries such as Hungary, Slovakia and the Czech Republic, which are heavily dependent on imports.
Import bans have been designed as a way to punish Putin for invading Ukraine and of depriving him of money he needs to fund his war effort.
But they are also helping to drive up prices and exacerbate inflation which is hampering economies, particularly in the West.
Biden – who has already released some oil from US strategic reserves as a stop-gap measure – had been hoping to get Saudi Arabia and the UAE to ramp up their own production as a way of calming the market.
But, if Macron’s words are to be believed, then it seems neither country is going to be able to step up and fill the gap.
Unless the US is willing to step up its own production, then that raises the prospect of further price hikes and even potential energy shortages come winter when energy demand soars.
The EU intends the import bans to deprive Putin of the money he needs to wage war in Ukraine, but they have also caused huge spikes in petrol and energy prices
Russia is now into its fifth month of fighting in Ukraine and is making territorial gains in the east, but has seen its economy hammered by sanctions
A statement from the UAE’s top energy official late on Monday said that his country is producing its assigned OPEC+ quota of 3.168 million barrels per day (bpd).
‘In light of recent media reports, I would like to clarify that the UAE is producing near to our maximum production capacity based on its current OPEC+ production baseline,’ said Energy Minister Suhail bin Mohammed Al Mazrouei.
World oil prices have been steadily rising in recent months due to a shortage of supply and rebound in demand from the worst of the coronavirus epidemic. Prices have risen further since Moscow invaded Ukraine in late February.
On Monday, benchmark crude rose after Reuters reported Macron’s comments. Brent oil prices rose 1.7% to above $115 per barrel as the West seeks ways to reduce Russian oil imports to punish Moscow.
Saudi Arabia is producing 10.5 million bpd and has a nameplate capacity of 12.0 million-12.5 million bpd, which in theory shall allow it to raise production by 2 million.
The UAE is producing some 3 million bpd, has capacity of 3.4 million and has been working on raising it to 4 million bpd.
Europe is looking for ways to replace as much as 2 million bpd of Russian crude and some 2 million bpd of refined products it had been importing from Moscow before the Ukraine war.