Powerful figures criticize the White House for pushing OPEC to increase production

Big oil figures in the US oil industry (Big Oil) expressed displeasure with the White House’s push for OPEC and its allies to increase production this week.

In the middle of this week, the Biden administration called on OPEC + to increase production in response to the escalating energy price situation.

The OPEC+ urgings hardly work

The American Petroleum Institute (API), a powerful lobbying group for the US oil and gas industry, believes that US President Joe Biden should find a way to boost domestic oil production before looking abroad.

“You (President Biden – BTV) should think first of the American producers, not the Organization of the Petroleum Exporting Countries (OPEC) – an organization that has dominated our country for decades because of them. is our top supplier,” said American Petroleum Institute President Mike Sommers on CNN.

In response, a White House official affirmed the importance of ensuring “stable and reliable energy markets at this critical time” in light of the global post-pandemic recovery.

“President Biden has made it clear that he wants Americans to have access to affordable energy, including pumping at the pole,” the official said.

The average price of gasoline in the United States is near a seven-year high at $3.18 a gallon, up from $2.18 last year, according to data from the volatility-tracking platform. fuel prices AAA Gas Prices.

The high energy prices are due to insufficient supply to meet the demand for fuel for planes and cars that skyrocket again as more and more Americans hit the streets after being vaccinated against Covid-19.

OPEC and its allies, including Russia (referred to as OPEC+) have tightened the oil supply that they have cut off when the pandemic broke out for more than a year, and gradually eased oil production. mine to the market.

In the middle of this week, the Biden administration called on OPEC + to increase production to cope with the escalating energy price situation. US national security adviser Jake Sullivan said in a note that OPEC+ “needs to do more to support the recovery”.

Before Mr. Biden, former President Donald Trump also made a similar move with OPEC, although Mr. Trump once dominated the US energy sector. Mr. Trump took the unusual step of suggesting OPEC cut production to save US oil producers from the impact of the historic low oil price caused by the Covid-19 pandemic and the oil price war in OPEC +.

However, in a note sent to customers this week, US investment bank Goldman Sachs assessed that the recent move to approach OPEC + by the White House is “not likely to convince” effectively in the short term, because the bank The bank is concerned that oil demand is weakening due to tightened anti-epidemic measures to prevent the spread of the Delta variant.

Fossil fuels are being suppress?

A certain beneficiary of domestic energy production, the American Petroleum Institute exhorts that untying the US oil producers will be a better solution to the current situation.

“We have the strategic advantage of an energy revolution that began under President Obama. We should do everything we can to encourage (oil) production in the United States,” said Mike Sommers, president of the Institute. US Oil and Gas (the organization representing ExxonMobil, Chevron and many other large energy companies) commented.

The president of the American Petroleum Institute criticized the Biden administration for its regulatory crackdown on the fossil fuel industry. “We’re talking about a real administration that in its first eight months in office did nothing but try to limit the growth of America’s oil and gas industry,” said Mike Sommers.

On his first day in office, President Biden immediately brought the United States back into the Paris Agreement on climate change, ordered the suspension of oil and gas drilling leases at the Arctic National Wildlife Refuge, and revoked the license of the Keystone XL fuel pipeline project – a project that is controversial and is expected to be difficult to carry out oil transportation from Canada to the US until 2023.

The Biden administration has also suspended drilling for oil and gas drilling in the lands and territorial waters of the United States. However, the move was temporarily blocked by a federal court in June.

“I don’t think what Biden did in his first eight months in office is the only reason why prices are so high now,” said the president of the American Petroleum Institute. “There is no doubt that market forces are present,” added a representative of the American Petroleum Institute.

On the other hand, Mr. Sommers acknowledged that the suspension of oil and gas leasing, which the Institute of Petroleum has strongly opposed, does not affect current prices. Instead, the president of the American Petroleum Institute said that this move, along with the cancellation of the Keystone XL fuel pipeline project, added to policy uncertainty and would not stimulate investment in the US energy industry. Future.

The question is why the US oil producers do not come to the rescue of the current situation. Indeed, regulation is not the only reason why US oil production’s recovery has slowed after the Covid-19 pandemic.

After a frenzied burn of money a decade ago, American oil companies are under enormous pressure from Wall Street to do more retraining and share profits with shareholders. They are in no hurry to rescue the oil market.

“Financial discipline is taking place in the current oil slick. The focus now is on making up for investors who have lost so much money over the past decade, especially in 2020,” said the president of the Petroleum Institute. US stated.

Understandably, the current US administration’s tougher approach to the oil and gas industry is being driven by the urgency of the climate crisis, especially after many environmental regulations were broken. dismiss in 4 years under former President Trump.

This past May, the International Energy Agency (IEA) warned that the world needed to stop exploiting oil and natural gas immediately to avert a climate catastrophe.

White House officials assessed that gas prices are now lower than in the first half of the 2010s and close to market fluctuations in 2018 – the mid-term of the Trump administration. But this person said: “We still have to be cautious”.