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Biden Has 'Only Bad Options' for Bringing Down Oil Prices
NY TimesNo Paywall
HOUSTON — When President Biden meets Crown Prince Mohammed bin Salman in Saudi Arabia, he will be following in the footsteps of presidents like Jimmy Carter, who flew to Tehran in 1977 to exchange toasts with the shah of Iran on New Year’s Eve.
Like the prince, the shah was an unelected monarch with a tarnished human rights record. But Mr. Carter was obliged to celebrate with him for a cause that was of great concern to people back home: cheaper gasoline and secure oil supplies.
As Mr. Carter and other presidents learned, Mr. Biden has precious few tools to bring down costs at the pump, especially when Russia, one of the world’s largest energy producers, has started an unprovoked war against a smaller neighbor. In Mr. Carter’s time, oil supplies that Western countries needed were threatened by revolutions in the Middle East.
During the 2020 campaign, Mr. Biden pledged to turn Saudi Arabia into a “pariah” for the assassination of a prominent dissident, Jamal Khashoggi. But officials said last week that he planned to visit the kingdom this summer. It was just the latest sign that oil has again regained its centrality in geopolitics.
Just a few years ago, many lawmakers in Washington and oil and gas executives in Texas were patting themselves on the back for an energy boom that had turned the United States into a net exporter of oil and petroleum products and made it more energy independent. With prices rising, that achievement now looks illusory.
“A president has to try,” said Bill Richardson, an energy secretary in the Clinton administration. “Unfortunately, there are only bad options. And any alternative options are probably worse than asking the Saudis to increase production.”
Two other oil-producing countries that could increase production — Iran and Venezuela — are U.S. adversaries that Western sanctions have largely cut out of the global market. Striking any deal with their leaders without securing major concessions on issues like nuclear enrichment and democratic reforms would be politically perilous for Mr. Biden.
Two other oil-producing countries that could increase production — Iran and Venezuela — are U.S. adversaries that Western sanctions have largely cut out of the global market. Striking any deal with their leaders without securing major concessions on issues like nuclear enrichment and democratic reforms would be politically perilous for Mr. Biden.
“Presidents may be the most powerful figure in the American government, but they cannot control the price of oil at the pump,” said Chase Untermeyer, U.S. ambassador to Qatar in the George W. Bush administration. “Even if prices do go down for reasons out of his control, President Biden probably won’t get much credit for it, either.”
Mr. Biden and his aides have been jawboning U.S. oil executives to pump more oil with little success. Most oil companies are reluctant to expand production because they fear that drilling more now will lead to a glut that will send prices tumbling. They remember when oil prices fell below zero at the start of the pandemic. Big companies like Exxon Mobil, Chevron, BP and Shell have largely stuck to the investment budgets they set last year before Russia invaded Ukraine.
8 replies
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= new reply since forum marked as read
" Most oil companies are reluctant to expand production because they fear that drilling more now will lead to
a glut that will send prices tumbling."
Knew that would happen, if the war ended tomorrow and Russia could start selling oil again, prices would
come down fairly quickly and our oil producers would have too much stockpiled.
Really a shame Biden & Congress can't find a way to lower the gas pump prices, they did try with their
price gouging legislation, but Rs stopped that. This Administration should have TV ads every hour on
every TV station educating the public that they can thank Rs for high gas prices. Midterms coming.
