President Joe Biden has exhausted every possible tool to combat soaring energy prices. Well, except for one. The administration is releasing millions of barrels of oil from the nation’s emergency Strategic Petroleum Reserve (SPR), which is now at a 36-year low. The White House is begging the Organization of the Petroleum Exporting Countries (OPEC) to turn the taps on to stabilize global markets. Biden is blaming everyone under the sun, from mom-and-pop gasoline stations to Big Oil, for the calamity that has sent gasoline and diesel to the moon. So, what is his final mechanism that could resolve this crisis?
Please, OPEC, Can We Have Some More?
Once again, the president is looking overseas to solve America’s energy woes. Biden is trying to encourage Saudi Arabia and the United Arab Emirates (UAE) to boost global exports to ease prices. This comes nearly a year after the White House pleaded with these two countries and other OPEC members to expand output. But while the cartel earlier dismissed Washington’s pleas, members are already running at maximum capacity, something conveyed by French President Emmanuel Macron in a viral clip.
Speaking on the sidelines of the latest G7 summit, Macron told his US counterpart that UAE leader Sheikh Mohammed bin Zayed Al Nahyan informed him that the state is “at a maximum production capacity.” Macron added that the Saudis also would not have a huge capacity for another six months.
A statement from the UAE’s top energy official, Energy Minister Suhail bin Mohammed Al Mazrouei, reiterated this position, clarifying “that the UAE is producing near to our maximum production capacity based on its current OPEC+ production baseline.”
The group will complete its two days’ worth of meetings in Vienna on June 30. OPEC has previously stated that it would increase output by 648,000 barrels per day each month in July and August. However, there has been some concern that oil-producing countries may either freeze or reduce production over fears that a global recession could reduce demand.
After the US finally achieved energy independence under former President Donald Trump, OPEC became an irrelevant entity, and some analysts had written its obituary at the start of the coronavirus pandemic when energy prices cratered. The US had been producing more than 13 million barrels per day (bpd) of crude before the COVID-19 public health crisis struck. Over two years later, the country is barely cracking 12 million with the oil and gas sector under a coordinated attack between the administration and the green agenda acolytes. As a result, OPEC is back in focus again, with global financial markets monitoring every word emanating from its monthly meetings.
But what about Russia? The Group of Seven thinks it has another strategy to stop the war in Ukraine and potentially bring down the price of black gold.
So Vi Et: Another Hammer in Moscow’s Coffin?
(Photo by: Michael Siluk/UCG/Universal Images Group via Getty Images)
The G7 power brokers are exploring an initiative that would install a cap on the price of Russian oil. According to the proposal, these advanced economies would impose a ban on transporting Moscow’s crude that has been sold above a pre-determined price. This, leaders argue, would deplete the Kremlin’s roughly $600 billion war chest because it would connect financial services, insurance, and shipping to oil.
Since Western countries have already erected sanctions and restrictions on Russian energy, would this have any meaningful impact, especially since Moscow has transitioned to exporting more of its energy to China, India, and 35 other states? Market analysts also worry that this decision could force the Kremlin to cut off more gas to Europe sooner. When inventories are extremely low, and oil-producing states are not sending enough to the continent, an oil price cap could have far greater consequences for the international economy, experts warn.
Indeed, state-supported Gazprom has already slashed the amount of gas flowing through the Russia-to-Germany Nord Stream 1 pipeline by 60%. This prompted many major economies to resuscitate their coal-fired power plants. In addition, the worldwide bombardment of penalties has hardly hurt the Eastern European country’s energy industry. In fact, Russian seaborne crude exports are at a three-year high as it ships more petroleum products to Asia.
Joe Biden (Photo By EUROPA PRESS/E. Parra. POOL via Getty Images)
Mr. President, Turn on These Taps
As Liberty Nation recently reported, the American Petroleum Institute (API) unveiled a ten-point initiative to facilitate a domestic energy revival in an environment where the price of West Texas Intermediate (WTI) crude is north of $110 a barrel. This plan consists of ending permitting obstruction, repairing the National Environmental Policy Act (NEPA) permitting processing, and approving oil and gas export applications. The Oval Office has rejected these types of requests, alluding to the magical number of 9,000 permits, a misleading figure that has been debunked.
Ultimately, with close to all tools and tactics being exhausted and explored, the best option is to tell American companies to “drill, baby,” drill” by, at the very least, pausing the green agenda until the crisis has been eliminated. Instead, Biden wants to go to war with fossil fuels and proclaim everyone except his own administration is to blame. Thankfully, the oil and gas sector is attempting to stimulate activity without the help of anybody and taking the risk of leaping over immense regulatory hurdles and Washington roadblocks.
