With prices at the pump sitting at seven-year highs, $3.18 per gallon, per AAA, the pressure mounts on the administration, which noted OPEC's July agreement to raise production by 400,000 barrels was "simply not enough at a critical moment in the global recovery."
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"President Biden has made clear that he wants Americans to have access to affordable and reliable energy, including at the pump. Although we are not a party to OPEC, the United States will always speak to international partners regarding issues of significance that affect our national economic and security affairs, in public and private. We are engaging with relevant OPEC+ members on the importance of competitive markets in setting prices. Competitive energy markets will ensure reliable and stable energy supplies, and OPEC+ must do more to support the recovery," wrote National Security adviser Jake Sullivan.
There is no doubt that tight oil supplies are one of the reasons why gasoline prices have gone up and that is putting the economic recovery at risk, but it is the Biden administration's policies, not OPEC, that are to blame.
How can OPEC Plus be the reason for high energy prices when U.S. energy concerns are not producing as much oil as they did before the pandemic? To blame OPEC is very hypocritical of the administration because this is the same administration that has canceled the Keystone Pipeline, put drilling moratoriums on federal lands, and has discouraged investment in oil and gas production and pipelines at home.
He discouraged U.S. oil and gas production by rejoining the Paris climate accords and vowed to make "the most aggressive" carbon cut the U.S. can make. He also said he sought to end all so-called fossil-fuel subsidies and that is causing oil and gas investment to look elsewhere.
U.S. energy production that had soared over 13 million barrels a day under the Trump administration has fallen to just 11.2 million barrels a day, according to data from the Energy Information Administration (EIA). The EIA reduced its outlook for oil production going forward as well only getting to 11.8 million barrels all of next year. That is because U.S. producers are pulling back on investment because of the Biden administration's energy and climate policies.
Why doesn’t the Biden administration call on U.S. energy producers to raise output? U.S. energy producers should be able to build back better. They are the cleanest and most efficient producers on the face of the earth and could create high-paying U.S. union jobs. The Biden administration outsourced our oil and gas production to foreign countries and now it is complaining that other countries are not doing enough to fill the void from the pullback from U.S. energy producers.
The Biden administration now seems to be admitting that its policies have allowed OPEC plus Russia to have much influence on U.S. gasoline prices and our economy. It was the Biden administration that gave it that power. Under Biden and stricter rules, we not only have less oil production but also less refining capacity and are more dependent on gasoline imports from other countries. USA oil exports have plummeted in recent weeks and we are becoming more dependent on oil imports. That is also going to add to our trade deficit that was brought down in large measure by U.S. energy exports.
The Biden energy policy has been a failure. It's failed the American people. It's failed American businesses. It's failed union oil workers. Hopefully, this OPEC plea for more oil will be a wake-up call for the administration. It should start to realize that the best energy producer in the world is a U.S. energy oil and gas producer. The Biden administration should work with them not against them. I'd much rather work with U.S. energy companies than have to beg OPEC and Russia for more oil. Let U.S. energy and gas companies do their job and reduce our dependence on OPEC plus oil once and for all.
Phil Flynn is senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at firstname.lastname@example.org.