Boy, did President Biden blow it with the Saudi’s. Despite going hat-in-hand to beg for more oil from Mohammed bin Salman (MBS), the fist-bumping Saudi Crown Prince and Prime Minister, OPEC is throwing Biden under the bus by cutting oil production by up to 2 million barrels per day.
When Biden said all those negative things about MBS during the campaign, he must never have envisioned a time when he might need them to increase their oil production. Despite his supposed foreign relations acumen (ha!), Biden chose instead to insult one of this county’s long-standing allies in the Middle East, who just happens to be one of the top oil producers.
During Trump’s presidency, Israel signed several peace agreements with different Arab states and cooperation between Israel and Saudi Arabia increased. Biden has brought us nothing but war.
Relations between the United States and Saudi Arabia were positive for decades until Biden became president. Now Saudi Arabia is moving closer to Russia and is cooperating with Russian efforts to use oil as a weapon. At a time when we need more allies than ever, Biden is alienating them. He’s calling them on the carpet and trying to boss them around, and it is backfiring.
Possible Export Restrictions
As oil prices start to rise in California and in some East Coast cities, Biden and the democrats are panicking. With the midterms just four weeks away, five or six-dollar gas will not win many votes. Now the Biden administration is talking about prohibiting the oil companies from exporting oil so that there would be more for use here in the states.
That may sound like a good idea, but it’s like putting a bandage on finger for all to see when you stubbed your toe–it won’t stop the pain. The problem the U.S. is facing is not simply a lack of oil. It’s also a lack of refinery capacity and pipelines. And why do those problems exist? Because democrat politicians and policies make getting permits to build refineries and pipelines almost impossible. As a result, oil refined on the Gulf Coast can’t get to the East Coast.
Pipelines are the most cost-effective way to transport energy from the wellhead to the city where it is needed to heat a home or provide gas and diesel for cars and trucks. Pipeline growth hasn’t kept up with population growth and demand. This causes shortage and drives up costs.
When gas and other energy prices rose, the Biden Administration and their liberal friends thought it was a good thing because it would force people to buy electric cars and invest in solar and wind power. Then the rising cost of energy spiked inflation, people started feeling a pinch in their wallets, and the prospects of democrats running for office started to slip, along with Biden’s popularity. By then, it was too late for the Biden administration to do anything. They had already curtailed drilling and limited fracking. Oops.
Inflation and gas prices were both rising well before Russia invaded Ukraine, but the invasion steepened the curve and made things worse. Russia was a significant provider of oil and gas to Europe and the world, and when sanctions cut those deliveries back, the global market looked elsewhere. That made gas and oil more expensive in the U.S.
You see, it’s a global market and companies will sell their gas and oil where they can make the most profit. Attempts to control the global market, through things like export restrictions or price controls, generally backfire. In this case, should the Biden administration implement export restrictions, it would reduce the amount of oil produced in the U.S., tighten the global market, cause prices to rise, and result in a loss of jobs in the oil and gas industry.
That subbed toe I mentioned early? That’s because Biden stepped in it. I can only assume there are no decent economists on the White House staff because they’ve fumbled every economic play they’d made.
Gas has creeped up several cents here in the Appalachians. I filled my tank two days ago when I found a station that had not changed their price. I saved seven cents per gallon compared to the other local stations. (It pays to shop around.) All my fuel cans are full as well. I don’t expect we’ll see gas this low again for years, if ever.