Biden’s War on Oil Hits Consumers

Source: The Wall Street Journal.

There are those who say rising gas prices at the pump are not President Biden’s fault. Well, OK, if placing blame is important to those people, let them have at it.

The more important reality is that producing more oil than we consume is beneficial to America. It may may or may not drive down prices at the pump, but it would mean that we are in control of our own economic destiny.

Some people argue that greater supply always translates into low prices. There is no theory or experience in economics to confirm this view. On the contrary, when an oil-consuming economy cannot satisfy its own demand, then it becomes subservient to external oil-producing economies and vulnerable to any price shocks they may impose or create.

Put another way, a nation that produces more oil than it consumes is inherently protected from global oil market volatility.

We Americans should want this kind of protection, and it is within our means. Regrettably, as the WSJ piece shows, our president doesn’t want it.

16 thoughts on “Biden’s War on Oil Hits Consumers

    1. Uh, the goal is to protect the environment.

      You have a tell when you are about to provide one of your “alternative facts.” It is the word “remember” with its implication that you are about to provide something that is true.

      Just last week, Biden’s diplomatic pressure on Arab countries to increase production resulted in the largest single one day drop ever in the wholesale price of oil. That is hardly the action of someone whose “goal” is higher fuel prices. And it is the opposite of Trump’s actions when he pressured the Arabs to hold back on production to help his friend Putin. The intended impact of THAT action was to RAISE the price of gasoline. Where was your pissing and moaning then?

      https://www.reuters.com/article/us-global-oil-trump-saudi-specialreport/special-report-trump-told-saudi-cut-oil-supply-or-lose-u-s-military-support-sources-idUSKBN22C1V4

      “Biden’s War on Oil” is just another Big Lie sold to the eager dupes that the Putin Party depends on.

      Liked by 1 person

        1. There is a well-known adage that you judge by actions and not words. You have invoked it countless times in trying to justify Trump.

          This link is to a cherry-picked moment of obvious off-the-cuff hyperbole. If you think this moment justifies the “Biden’s War on Oil” baloney while you ignore the facts of what has actually been done, that is just more evidence of how eager you are to suspend critical thinking.

          Liked by 1 person

          1. I suppose you are referring to this January 20, 2021 Executive Order which systematically began the reversal many of the reversals of previous environmental policy that had been done by Trump. Elections have consequences. They did when Trump won and they did again when Biden won.

            https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-protecting-public-health-and-environment-and-restoring-science-to-tackle-climate-crisis/

            Forbes did an analysis of the impact on the oil industry of this order. Literally the bottom line of the analysis was. . . “For those who are worried about your gasoline prices going up, this is definitely not the reason.”

            https://www.forbes.com/sites/rrapier/2021/01/29/how-president-bidens-executive-orders-impact-the-oil-industry/?sh=4ad216364ef4

            Liked by 1 person

    1. I’m concerned about what we buy on the global market. That’s the part that makes our economy vulnerable.

      Like

      1. But it still comes down to Don’s beloved “market”. Oil is a global commodity, traded globally, not just in individual countries. Isolationism appears to be what you are calling for. If so, then how would that work?

        By the way, the closing price of crude yesterday was down to just over $106/bbl. Looks like there is a downward trend in prices that we should all see translate to the pumps sooner rather than later. (History has shown it takes longer to come down than to go up, but…)

        Also the major oil companies announced their quarterly profits recently. 10’s of billions of PROFIT. I think they can afford to come down a bit on their prices and still provide their stockholders a nice little dividend.

        Liked by 1 person

        1. RE: “Oil is a global commodity, traded globally, not just in individual countries.”

          So is wheat. Would you rather live in a country that produces more wheat than it consumes, or one that consumes more wheat than it produces?

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          1. One of the largest wheat producers in the world is currently being invaded by one of it’s neighbors. Also, for decades we sold wheat to the Soviets on the GLOBAL MARKET. We do pretty well in that market as well.

            Your analogical question is moot.

            Also, you ignored my comments about 1) Crude prices dropping and 2) Oil companies profits. But that’s OK. You tend to ignore the other important parts of other’s posts and focus only on what you think is important. I believe the term is “cherry-picking.”

            Like

      2. My understanding is that all the oil that the companies extract is part of the global market. So if refiners buy it from here or Saudi Arabia, it makes little difference excepting transport.

        Here is the site that tracks imports and exports. We might be less dependent upon imports if we didn’t export any oil. I think that the oil multinationals would have a problem with that.

        https://www.eia.gov/tools/faqs/faq.php?id=727&t=6

        Liked by 1 person

        1. RE: “My understanding is that all the oil that the companies extract is part of the global market.”

          I recommend thinking through the implications of that. For example, if U.S. refiners can’t buy oil internationally, and can’t buy oil domestically, isn’t that a problem?

          I think of oil as a strategic resource. It is not like wine, cheese or shoes. Comparative advantage doesn’t apply to oil in the same way as to other goods.

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          1. Here is some reporting on global prices.

            https://www.cnn.com/2022/03/15/investing/premarket-stocks-trading/index.html

            An interesting note on what I’ve been saying all along

            “Oil is still trading significantly above what it costs to produce it,”…

            That explains the huge profits oil companies make. A 10% cut in profits could translate to a similar cut in consumer prices. $16 billion for Shell, less 10% is still $14.4 BILLION in profit. Simplicity, yes. But not inaccurate.

            Also, this: “After Russia invaded Ukraine, global oil prices experienced a dramatic spike.”

            I find this to be further proof that it is NOT just policy that affects global oil prices.

            Liked by 1 person

          2. “ For example, if U.S. refiners can’t buy oil internationally, and can’t buy oil domestically, isn’t that a problem?”

            Why couldn’t they buy it domestically?

            Liked by 1 person

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