Biden has no choice but to "showdown": before the end of the Russia-Ukraine conflict, there is no end to high oil prices!

Jul 03, 2022

Financial Associated Press on July 1, US President Biden said at a press conference in Madrid, Spain on June 30: Until the end of the Russian-Ukrainian conflict, the high oil prices in the United States may not see an end.

U.S. gasoline prices have skyrocketed since the start of the year, hitting an all-time record above $5 a gallon two weeks ago. According to data from the American gasoline website AAA, the average price of gasoline in the United States today (July 1) was $4.842, a slight drop from the previous two weeks.


Biden's words almost made clear his inability on oil prices, which also means that Biden's Democratic Party may lose multiple seats in both houses of Congress in the November midterm elections.


Russian-Ukrainian problems?


In recent months, the White House has taken a number of measures to stabilize oil prices, such as repeatedly ordering the release of oil from the Strategic Petroleum Reserve, relaxing the regulation of biofuels, and proposing a temporary exemption from gasoline taxes, but so far they have not effectively prevented it. Gasoline prices skyrocketed.


This time, he once again sacrificed "Russian and Uzbek Dafa", but he did not get many people's understanding.


Some consumers argue that the U.S. imports only 20 percent of its oil from Russia, and the U.S. ban on Russian oil would not have caused such a high cost spike. Another said that the so-called Russian-Ukrainian impact on oil prices was only part of the reason that oil prices in the United States had risen to $3.41 a gallon in December last year.


Previously, Chevron CEO Mike Wirth's response to Biden may better explain the high gasoline prices in the United States and the impotence of the White House.


Biden previously criticized U.S. oil producers and refiners for their reluctance to increase production to help U.S. consumers because of profit. Hearing this, Wirth said that the oil industry has increased production by 15%, and he does not believe that there will be new refineries in the United States. The key reason is the policy of the Biden administration.


“Actually, by investing in existing refineries, you can also increase production by retrofitting existing units … but what we’ve seen over the past two years is production shutdowns, refineries closed, refinery units reduced, or repurposed for Biorefinery. And the public policy of the U.S. government is to reduce the demand for products produced by U.S. refineries.”


He further questioned: How do you go to the board of directors and shareholders and say that we are going to spend billions of dollars in a market to invest in new production capacity, and then face pressure from the government after the investment, because the government wants to turn to environmental protection and give up traditional energy?


Just from Wirth's words, Russia and Ukraine are only one aspect of the high oil prices in the United States that want to be quickly controlled. More importantly, Biden needs to ensure that more refineries enter operation and increase gasoline supply. But for him, it was a declaration of failure of his environmental policy.


Under the dilemma, Biden now admits that there is no way, and maybe it is a solution.