OPEC isn’t making nice with the Biden forces
The Biden administration launched a full-scale pressure campaign in a last-ditch effort to dissuade Middle Eastern allies from dramatically cutting oil production, according to multiple sources familiar with the matter.
But that effort appears to have failed, following Wednesday’s crucial meeting of OPEC+, the international cartel of oil producers that, as expected, announced a significant cut to output in an effort to raise oil prices. That in turn will likely cause US gasoline prices to rise at a precarious time for the Biden administration, just five weeks before the midterm elections.
Among other things, maybe Kuwait, Saudi Arabia, and the United Arab Emirates aren’t all that keen on helping the Biden administration?
But Biden and company say “trust us!”:
The administration has made it clear to OPEC+ for months, the senior US official said, that the US is willing to buy OPEC’s oil to replenish the SPR. The idea has been to convey to OPEC+ that the US “won’t leave them hanging dry” if they invest money in production, the official said, and therefore, that prices won’t collapse if global demand decreases.
I don’t know why anyone would trust this administration’s promise not to leave them “hanging dry.” Or any promise at all, actually.
The SPR stands for Strategic Petroleum Reserves, which Biden depleted in order to temporarily lower the price of gas and score political points.
“Temporarily raise” ?
LeClerc:
Oops, thanks, will fix.
Willingly ceding control of the production of vital resources to nation states that
– hate everything about our western cultural values
– couldn’t care less about extracting such resources in safe and environmentally responsible ways
– view us as advisaries geopolitically
– we have broken many promises to and therefore have no real reason to trust us, let alone do us any favors
seems absolutely utterly insane to me. There just doesn’t seem to be any reasonable justification for this course of action, unless you’re a person who wants to see America and the rest of the Western nations brought down and destroyed. It’s madness, pure and simple.
I’ve said this before and I will say it again, we are being governed by the equivalent of a mid-sized company’s HR department. These are the same people who, if put in charge of a company with dwindling revenue on the verge of bankruptcy, would spend $200 on motivational posters and start a new DEI initiative. And then congratulate themselves on their good work and pay themselves a bonus.
Control of energy is fundamental to state security, as has been shown best in The Prize and re-emphasized most recently by the European situation, where they attempted to set prices on something they don’t own, and can’t do without – and now face at least 2 years of real, crushing hardship because they haven’t secured their energy supply, or addressed redundancy.
When the price of oil dropped precipitously during the COVID lockdowns, Trump propose to top up the SPR with oil at $2 / bbl. The Democrats reacted predictably, in role, with derision. Now they propose to do the same, buy a vastly bigger quantity of oil (because of their own cynical mis-management), from a foreign power at 50x the cost.
The biggest lesson to voters should be the collective reaction from the oil states: The Biden Administration deserves none of our consideration, because they have nothing to offer.
Gee, if only there were a large country with huge oil and gas reserves, plus the technology and infrastructure to extract them.
Let’s see; Joe Biden is trying to strike a deal with Iran. Iran presents an existential threat to Saudi Arabia and other Arab nations.
The Saudi’s, at least as it regards this issue, has decided to cozy up with Israel – which never was an existential threat to anybody – to counter the Iranian threat. Maybe for the Saudi’s it’s a case of “the enemy of my enemy is my friend, but IMHO I don’t think so.
Regardless, the Saudis have made it abundantly clear – so clear, that even the senile Joke Bidet can comprehend it, with some help of course from DOCTOR jill bidet.
But no; bidet and the morons who provide the senile joe with advice , are doing all they can to reach an agreement with Iran.
Jeez, I wonder why OPEC – led by Saudi Arabia – is telling Joke Bide to
go F himself.
I simply don’t understand it !!
The nations of Europe will be most affected by OPEC’s oil cutback. The are already in a world of hurt re: their cost of oil and gas, and it’s about to get worse.
I wonder if those German UN diplomats that laughed during Trump’s UN speech are still laughing.
I doubt it. But hey, I could be wrong.
The Saudis saw how this administration treated Afghanis with their precipitous bug out and are acting accordingly. No trust is warranted.
Perhaps OPEC checked in with Joe Manchin on the likelihood of follow through on the “trust us” assertions from Biden and Democrats.
Given the closer and closer ties between the Saudis and Russians over the past 7 years, the hope that OPEC would respond positively to Biden’s pleas was doomed to failure.
“Putin and the prince: fears in west as Russia and Saudi Arabia deepen ties”
“Prince Mohammed’s decision to strengthen relations has alarmed allies, but he has long admired Russian leader”
https://www.theguardian.com/world/2022/oct/05/putin-mohammed-bin-salman-russia-saudi-arabia-deepen-ties
I just filled one of our cars. Gas went up 8 cents from this morning already.
the US is willing to buy OPEC’s oil to replenish the SPR
Setting aside whether the Biden Administration would fulfill its part of this agreement; what is in it for OPEC? It was full storage terminals that caused the oil price inversion. Empty storage is demand. The problems of the US and EU are not really OPECs concern, especially considering most of those problems are the desire to move away from oil; OPEC’s primary product. OPEC can wait until Winter to increase production.
On the US side, how does agreeing to purchase OPEC oil at a fixed price for the SPR lower costs? Oil has already dropped nearly $10/bbl. Some of that is Biden drainage of SPR and some of it is summer turn-around (TAR) maintenance finishing up. Hurricane Ian stayed mostly to the east of the GoM field, so those facilities are already back up. Also, we are entering Fall with mild weather lowering energy demand. Purchasing oil at a fixed price and putting it in long term storage sets a floor for oil prices. Biden is promising a floor to OPEC, but it screws Americans.
OPEC sees an opportunity to make as much money as they have been while delivering less product to market. What sensible business person wouldn’t make that deal?
I filled up two weeks ago for $3.79/ga. I filled up yesterday at $5.09/gal. Quite a jump in two weeks.
35 days to the mid-terms. A n obvious issue for the GOP to push very hard. If elected, we will drill baby, drill.
JJ, I strongly support a GOP Congress takeover. However, drill baby drill will require either a veto-proof majority in both houses, or a new executive. They can try using the power of the purse and see if Biden will blink.
Don’t forget, Russia is a member of ‘OPEC +’ and advocated to the Saudis a short while ago for a 1 mm bbl/day cut in production. The 2 mm bbl/day cut represents about 2% of world daily consumption.
We have to keot past solat cheerleader granholm creepy haaland the ferc chair the climate traitot (thats the way i regard john kerry and the esg zealots other than that
I would have thought elon would wait for the discovery but it seems to only go one way
Btw the saudi sovereign fund has something like 500 billion invested in blackrock
Biden has depleted the SPR and now OPEC is cutting production. Right before the midterm elections, nice. What’s going to happen if Russia shuts down oil and gas to Europe this winter?
That is the point of the exercise they want people to freeze and probably starve
I’m remembering a Japanese movie I watched a couple of years ago…the protagonist was an entrepreneur who was focused, right after WWII, in transitioning Japan’s energy infrastructure from coal to oil.
At one point, he investigates the site that was Japan’s naval oil reserve–the fuel to power their warships. Someone is lowered into a deep underground tank. Nothing there except some sludge on the bottom.
Seems like a pretty good metaphor for what the Biden administration is doing to US energy, and to the US in general.
What’s going to happen if Russia shuts down oil and gas to Europe this winter?
JJ:
I think it’s going to be bad.
Worse, I think this is the beginning of a new era, which is going to be tough, especially for Asia and Europe.
It looks like we are heading into the world Peter Zeihan has been predicting.
If memory served the jspanese drew their oil from indonesia those were the sanctions that certainly exacerbated plans for an attack if they didnt have it mind
The italians had been doing test runs in taranto harbor that prefigered the japanese attack with torpedoes thats what dusko popov witnessed
Kate, Tom Cotton was on Fox tonight (Laura Ingraham) and she asked him what Congress could do if they got majorities in both houses. He said they could use the power of the purse to force the administration to open up more leases, authorize more drilling, etc. He said they did the same thing in the last two years of the Obama administration. I trust him and think the GOP will be pretty solidly pro drilling. It’s in their Commitment to America, too. But we have to win first.
Thinking maybe the Opec players are not appreciated by the way the Sundowner administration is trying real hard to get Iran nuclear weapons
Drill, baby, drill is the right answer.
But also more nuclear power, including smaller, safer, molten salt (Thorium) reactors which are useless for making nuclear weapons. (Tho the tech is somewhat fungible; less so than money).
Saudis going more for Russia is likely part of their desire to be more balanced, like India, between the US power and the non-US power, including China. But part of that desire is the visible unreliability of US Democrats as allies.
That’s the Obama-Biden – Clinton legacy in the world: unreliable allies. Tens or hundreds of billions for Ukraine changes that a bit, but mostly towards “it pays to bribe Democrats thru their kids or their bribery foundations (like Clinton’s)”.
I agree with you, Tom Grey. And I think the Saudi move is more because they don’t trust the Democrats an inch. Why should they?
Kate, Tom Cotton was on Fox tonight (Laura Ingraham) and she asked him what Congress could do if they got majorities in both houses. He said they could use the power of the purse to force the administration to open up more leases, authorize more drilling, etc.
How about present the administration with 25 detailed appropriations bills each year rather than catch-all continuing resolutions? Did “Regular Order” McConnell ever accomplish this? Congress used to do this routinely prior to 1981.
And note, an appropriations bill for the Department of Education would have a line item for the National Assessment of Educational Progress and other statistical compilations, a line item for the inspector-general, and $0 for everything else. One for HUD would have a line item for the office which regulates lead paint exposure, another for the regulatory agency which overseas mortgage maws, another for the inspector-general, and $0 for everything else. Most of the FCC’s budget in recent years has gone to telecom subsidies; it should be $0. The Corporation for Public Broadcasting, the National Endowment for the Arts, and the National Endowment for the Humanities should receive $0. Scattered throughout the federal budget are line items for ‘grants, subsidies, and contributions’. If they haven’t anything to do with Social Security, Medicare, Medicaid, SSI, unemployment compensation, veterans’ benefits, disaster relief, or federal employee benefits, they should be $0. The Department of Energy at one time had a portfolio of $50 bn in equity’s and loans. Authorization to make further investments…$0.
Art Deco, I agree entirely. My frequently-squish Senator, Thom Tillis, sent a survey asking what my most important priority is for legislative action. I replied that Congress must re-assert control over policy priorities and spending, and return to regular order on spending bills.
In case anyone is—still—wondering why Saudi Arabia and Bahrain (amongst several others) are not terribly pleased with “Biden”—not that I think that there are too many “wonderers”, mind you…see the link below.
(Though one MAY well wonder why the current “caretaker” government, such as it is, of the Zionist Entity is so brain dead that it actually believes that “Biden” is an ally worthy of adulation, sucking up to, heeding…and, no less(!), deserving of a special public bribe—make that medal—of honor/friendship/support/what-have-you…so that one may seriously wonder if all those Abraham Accord Afficionados are seriously asking themselves just what kind of ally a curiously, if perhaps only temporary, “Bidenesca” ISRAEL might actually prove to be…when push comes to shove (which could happen at any moment)…
“Biden Administration’s Nuke Deal: Ensuring Russian and Iranian Terrorist Hegemony Over the Whole Arab World”—
https://www.gatestoneinstitute.org/18962/iranian-terrorist-hegemony
Interesting story here – America is not the only country buying gas they could produce themselves (or suffering from neither buying nor producing it).
https://www.americanthinker.com/blog/2022/10/protests_have_stymied_gas_production_in_the_netherlands_that_could_replace_most_of_russias_supply_to_germany.html
And now the Biden Administration is threatening OPEC with legislation on cartel behavior / price fixing.
I expect at a minimum further actions by OPEC / Saudis to weaken the petroleum dollar. And probably actions to reduce Saudi asset exposure in the West to seizure / sanctions.
@ Ray SoCa > ‘And now the Biden Administration is threatening OPEC with legislation on cartel behavior / price fixing.”
The Saudis used to be our bestest buddies, until they started making eyes at the Israelis (there’s a meme for that sort of thing.)
https://pics.me.me/normies-guy-looking-at-girl-meme-the-guy-looking-at-27489345.png
That was a rebuff to the Democrats that cannot be forgiven, even while Biden is begging them for favors. While pandering to their mortal enemies in Iran.
No wonder the daily news looks like a TV Guide synopsis of a soap opera’s episodes.
Ain’t it great to have the adults in charge again?