On Johnson’s jaunt to Saudi Arabia

Oil is a perfect market in which there is more than sufficient production to meet demand in the short to medium term and in which price will move to a level determined by supply and demand. Certainly the OPEC countries control supply, and therefore price on the margin. No western leader needs to go cap in hand to a producer, even a large one like the Kingdom of Saudi Arabia – the market will take care of that.

Oil prices have gone up because of actual or potential disruptions to Russia’s exports. Whilst this is significant it is not crucial. Other producers, especially in the Middle East, have the capacity to gear up production to cover the shortfall. But for now they are letting the situation ratchet up prices and rather enjoying putting the money in the bank.

Gas is much less flexible than oil – far from a perfect market. Europe has an extensive pipeline system and Russian supplies are important – not least for Germany. Britain is connected to this system though our still significant indigenous production combined with Norwegian supplies means that we only buy a small amount of gas from mainland Europe and none from Russia.

Liquified Natural Gas (LNG) is increasingly important matching to some extent Oil in that there is a number of suppliers (though far less than oil) and procurement flexibility. Britain buys some LNG from Russia but this is easily replaceable, at a cost.

A visit by Boris Johnson to the KSA would be largely a publicity stunt. The House of Saud always acts in its own interests – they may give Johnson a few cosmetic barrels but don’t be fooled.