WASHINGTON — President Biden faces a dangerous choice after global oil giants decided to cut production just weeks before key midterm elections that could sway gasoline prices: he should he stick to his policy of pleading with Saudi Arabia or take retaliatory action?
The announcement by the Saudi-led OPEC Plus energy cartel to cut production by 2 million barrels a day was widely seen in Washington as a stab in Biden’s back just three months ago. Traveled there to court the “pariah” and the dictatorial crown prince of the kingdom.
The question Mr. Biden now faces is how to deal with this seeming betrayal. In a deliberately bland comment, he told reporters on Thursday only that he was “disappointed” and considering unspecified “alternatives.” Frustrated at being overly submissive to the Saudis and eager to show voters toughness before heading to the polls, he pressured Biden to punish Riyadh.
New Jersey Rep. Tom Malinowski, a Democrat, said in an interview, referring to the US military presence in Saudi Arabia, that “he should start withdrawing stuff.” “It will get their attention. Action for action. Call their bluff. Are they? They know they can’t.”
Majority leader Chuck Schumer of New York state said Saudi Arabia’s decision to ally with President Vladimir V. Putin’s Russia to boost oil prices was a grave mistake.
“What Saudi Arabia did to help Putin continue his vile and vicious war against Ukraine will long be remembered by Americans,” he said. “We are considering all legislative avenues to best deal with this appalling and highly cynical behavior.”
Mr. Biden gave little indication of how far he would go.
Asked about Thursday’s production cuts, Biden said he was “looking at alternatives” for oil from OPEC+ countries.
His administration believes that by the end of the day, the daily production cuts will actually be probably half of the 2 million barrel target, as some oil producers are already missing their targets. Rather than punish Saudi Arabia, Biden aides said they wanted Saudi Arabia to release more oil from its strategic oil reserves and seek reconciliation with oil pumping Venezuela. The emphasis seemed to be on countering the movement of the
The administration also appears to be considering moves to pressure domestic energy companies to lower retail prices, possibly including restrictions on exports of petroleum products. “We have not announced any action on that front, but there are steps we will continue to evaluate,” Brian Dees, the president’s national economic adviser, told reporters.
The OPEC+ decision hardly came at a politically worse time for Mr. Biden, who had argued for support for the midterm elections because of falling gas prices. White House Chief of Staff Ron Klein has been methodically tracking prices at the pump as they have fallen, and Democrats have felt renewed momentum as a result.
2022 midterm elections
With the primaries over, both parties are shifting their focus to the November 8 general election.
But gas prices were already starting to trickle up even before the Saudi-led move, partly due to problems with refineries on the West Coast and Midwest. The national average rose 7 cents to $3.86 from Monday as demand increased and inventories dwindled, but well below the peak of over $5 a gallon in June.
Saudi Arabia has sent documents and charts to administration officials to justify its cuts, which it said were not intended to attack Mr. Biden. With oil prices hovering just below $80 a barrel in recent days, Saudi Arabia has warned U.S. officials that oil prices could fall further into the $70s and possibly even $60s, making it increasingly dependent on energy. He said he was concerned that his country’s budget would become unsustainable.
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Officials in the Biden administration say the real crisis will come in December, when a US-organized price cap to limit Russian oil profits will take effect and a European Union ban on the purchase of Russian oil will begin. I am afraid that
Mr. Biden’s options for dealing with production cuts are limited and there are trade-offs. He has already ordered the release of more oil from the Strategic Oil Reserves, but the reserves are now at their lowest level in 40 years, so they will run out in case of war or a natural disaster like another hurricane. There is danger.
He can push for restricted exports of processed fuels such as gasoline and diesel. This will increase supply and lower prices domestically. But it will harm our trading partners, especially our European allies, who seek to withdraw themselves from Russian energy and amplify global inflationary pressures.
The administration could open more federal land and waters to drilling and relax regulations on drilling, exploration and pipeline-laying to increase domestic production, but that would create a backlash among environmentalists. It may cause
“They need to loosen regulations, release all permits sitting on someone’s desk to drill on federal land, and use Keystone XL to get Canadian oil sands to American consumers.” We need to be able to unload the pipeline,” said Darlene Wallace. She is a board member of the Oklahoma Energy Producers Alliance. “And the president should encourage investors to invest in the oil business.”
If sanctions on Iran and Venezuela were eased, more than 1 million barrels of oil could be released a day, which would lead to lower prices and a reduction in Russia’s current sales to refineries in China and India. may replace part of the barrel of But nuclear talks with Iran have stalled with low prospects for progress, and prospects for a deal with Venezuela are bleak.
wall street journal reported The Biden administration is preparing to roll back sanctions so Chevron can resume pumping in exchange for a move toward the 2024 elections.The Maduro administration. “
In brief comments with reporters on Thursday, Mr. Biden did not rule out a possible change to Venezuela. “There are many alternatives,” he said. “We haven’t made up our minds yet.” Asked what Venezuela had to do to persuade the US to ease sanctions, Mr. Biden said “a lot.”
The president defended his decision to travel to Saudi Arabia in July despite campaign pledges to isolate the kingdom for the murder of Saudi journalist Jamal Khashoggi, becoming the de facto ruler. I exchanged fists with a certain Crown Prince Mohammed bin Salman. The US resident was killed on the orders of Prince Mohammed, according to the CIA.
Although not officially announced, American officials privately said at the time that they understood that Saudi Arabia and other energy giants would ramp up production by the fall.
But Biden reiterated on Thursday that he had other goals in going to Saudi Arabia, including promoting diplomatic ties with Israel.
“This visit was not for oil per se,” the president said. “The trip was about the Middle East and Israel and the rationalization of the position.”
“But it’s a shame,” he added of the production cuts.
Malinowski and other Democrats said the president should do more than just express disappointment. He introduced the bill, along with Illinois and Pennsylvania Democrats Sean Casten and Susan Wilde, calling for the removal of US troops and defense systems from Saudi Arabia and the United Arab Emirates.
With Congress adjourned until elections, the bill was more of a statement than anything else, but Malinowski said the bill was introduced in 2020 by Republicans and used by President Donald J. Trump to reduce pressure on Saudi Arabia as well. It said it followed the pattern of measures taken by Produced at a time when low oil prices were a concern.
Mr. Malinowski said Mr. Biden should likewise use the bill to boost Saudi Arabia. “The point of our bill is to give him the ammunition he needs, and I hope he uses it,” Malinowski said. “He took a risk. He put himself out there for this relationship, and this is how his friends should not react. So they better find new friends.” it might be good.”
Clifford Krause When Natalie Kitloff contributed to the report.