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The Saudis Snub Biden Again

October 6, 2022
tags: ,

By Paul Homewood

 

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The Biden White House has tried every gimmick to lower gas prices other than the one that would really matter: Call off its political and regulatory campaign against American oil and gas production.
As diplomatic humiliations go, it’s hard to top Wednesday’s decision by Saudi Arabia and its OPEC+ allies to cut oil production by two million barrels a day despite U.S. entreaties and a looming global recession.
News broke over the weekend that OPEC and its allies, including Russia, were contemplating cutting their production targets by one million barrels a day at their meeting this week. They want higher prices, and the prospect that this means rising gasoline prices before the November election sent the White House into overdrive.


CNN reported that senior Biden officials lobbied the Saudis, Kuwait and the United Arab Emirates to oppose the production cuts. According to CNN, draft White House talking points for Treasury Secretary Janet Yellen suggested that she inform our Mideast allies that “There is great political risk to your reputation and relations with the United States and the west if you move forward.”
The talking points also explained that production cuts would be a “total disaster.” A White House official told CNN “it’s important everyone is aware of just how high the stakes are.” The stakes certainly are high for the Biden Administration, which has claimed credit for this summer’s decline in gasoline prices.
The Saudis heard all this—and then raised their production cuts by an additional million barrels a day. They don’t seem to think risking relations with the U.S. is all that big a deal. And they put friendly relations with Russia above their “reputation” in the U.S.


The White House reacted in a statement on Wednesday—from national security adviser Jake Sullivan and economic adviser Brian Deese—by calling the production cuts “shortsighted.” The statement also said the decision is “a reminder of why it is so critical that the United States reduce its reliance on fossil fuels.”
Do these people know how preposterous they sound? No American President has done more to make the U.S. more dependent on foreign energy than Mr. Biden has in less than two years. He came into office promising to slash U.S. oil and gas production, and his regulators and the Democratic Congress are doing everything they can to make drilling difficult and investment non-economic.


Mr. Biden called Saudi Arabia a “pariah” during the 2020 campaign, delayed a planned arms shipment, and continues to pursue a nuclear deal with Iran that would give the Saudis’ main enemy hundreds of billions of dollars to promote terrorism and other trouble. The President had to go hat in hand to the Saudi Crown Prince in July to ask for more oil production, and all he got was a lousy fist bump.
Oil prices have been rising since Monday amid news of the OPEC productions cuts, and those cuts will flow into pump prices for U.S. consumers. Brent crude is back above $93 a barrel, and OPEC seems to want the price to go above $100. That will finance Russia’s war in Ukraine and help the domestic finances of the Arab governments.


The Biden White House has tried every gimmick to lower gas prices other than the one that would really matter: Call off its political and regulatory campaign against American oil and gas production. A statement from Mr. Biden to that effect would spur more production immediately in the Permian Basin and encourage new investment.
But the Administration won’t do it because it is too afraid of, or shares the beliefs of, the climate left that wants to ban fossil fuels. That’s the definition of “shortsighted,” and it leads to humiliations like the one Wednesday and higher prices for American families
.

https://www.wsj.com/articles/the-climate-censorship-campaign-big-tech-social-media-environmental-groups-letter-elon-musk-twitter-11665006072?mc_cid=670917a26f&mc_eid=870a48a53b

Yes indeed! The US does not have to go cap in hand to OPEC; it merely needs to get get domestic production growing again.

The US EIA’s own data highlights the problem. Last year, US crude oil output was 9% lower than in 2019:

chart(3)

https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrfpus1&f=a

So far this year, crude oil production is running at about 2% higher than last, but there is no indication of this being a sustained one.

Instead the real danger is that Biden’s war against fossil fuels will lead to a long term stagnation or even decline in coming years.

If you think oil prices are high now, just wait!

13 Comments
  1. Broadlands permalink
    October 6, 2022 2:57 pm

    It is an acknowledgment that the climate emergency and existential crisis was (and is) a scam.

  2. Lorde Late permalink
    October 6, 2022 4:26 pm

    Best I buy some more heating oil a bit quick like!

  3. that man permalink
    October 6, 2022 4:40 pm

    “The stakes certainly are high for the Biden Administration, which has claimed credit for this summer’s decline in gasoline prices.”
    —which will make the rise in gasoline prices well timed for the midterm elections on November 8th…..

    • that man permalink
      October 6, 2022 4:46 pm

      ….as mentioned in the article, but it makes me wonder about OPEC’s strategy behind the timing.

  4. John Hultquist permalink
    October 6, 2022 5:07 pm

    The “Climate Cult Wall of Shame” grows longer and brighter.
    Bloomberg will invest $85M to fight petrochemical companies expanding into Texas, Louisiana

    Meanwhile Brandon courts Venezuela for more of the dirtiest oil to be found and shows interest in rescuing Iran from its personal problems.
    The Saudi Crown Prince and his oil officials should be given a Peace Prize for showing common sense and economic rationality.

  5. Harry Davidson permalink
    October 6, 2022 5:11 pm

    OT: An interesting story in the The Register
    https://www.theregister.com/2022/10/05/micro_molten_salt_reactor/
    Molten salt reactor that will fit on a truck. I wonder if they can really do it.

  6. Stephen Lord permalink
    October 6, 2022 6:01 pm

    The Saudis are well aware of US politics. This will make it more likely that the Biden administration will lose the Senate. The Saudis worry about Iran and its nuclear weapons program and of course they will make more money.

  7. Harry Passfield permalink
    October 6, 2022 6:29 pm

    It’s reported that when FJB was touring Florida’s storm damage he told the local Mayor: ‘You don’t f*** with the Bidens’.
    I bet he didn’t get close to saying that to the Saudis….

  8. It doesn't add up... permalink
    October 7, 2022 3:11 am

    At least the WSJ cuts straight to the chase. It’s a message that needs to be rammed home across the West. Don’t just expect supply. Invest in more supply ourselves. If Western companies have equity on projects that comes with lifting entitlements. Instead of signing up to pay over the odds you have an investment that should make an acceptable return, and yet add to competition in the market for supply, capping prices. It’s what we did 8n the 1970s/80s to tackle OPEC then. We need to do it now.

  9. October 7, 2022 8:42 am

    Can’t get energy security with electricity from weather-dependent wind turbines and part-time solar panels, all loaded with Chinese components. Wakey wakey at the White House.

  10. Phoenix44 permalink
    October 7, 2022 9:24 am

    Biden is truly the epitome of arrogant unintelligent US politicians. He insults and tries to diminish Saudi then gets angry they won’t do as he demands. Having turned the US from a net exporter to a net importer.

    Why are the Left ultimately such unpleasant people?

  11. Realist permalink
    October 11, 2022 6:24 am

    It’s the same problem everywhere in Europe. The politicians refuse to drastically reduce, ideally scrap the taxes on the essential items of transport fuels. Worse, they keep inventing new ones and of course regulations that keep driving up prices.

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