Biden Begs Global Oil Cartel OPEC+ To Boost Production As Pump Prices Spike

By Josh Siegel August 12, 2021 | Image Source: Washington Examiner

The Biden administration is calling on OPEC and its allies to pump more oil in order to counter rising gasoline prices that could crimp the global economic recovery from the pandemic.

The White House said a deal reached last month by a group of oil-producing nations known as OPEC+ to boost production is “simply not enough” during a “critical moment” in the global recovery.

“We are engaging with relevant OPEC+ members on the importance of competitive markets in setting prices,” national security adviser Jake Sullivan said in a statement Wednesday. “Competitive energy markets will ensure reliable and stable energy supplies, and OPEC+ must do more to support the recovery.”

But by calling for increased global oil production, President Joe Biden is in a tricky spot, as he is also at the same time imposing policies to tighten domestic output in an effort to curb greenhouse gas emissions that cause climate change.

The Biden administration played a behind-the-scenes role in helping OPEC+ resolve a standoff last month to restore gradually all of the oil production they shuttered during the pandemic.

OPEC+, a group of oil-producing nations led by Saudi Arabia and Russia, notched an unprecedented pact in April 2020 to cut nearly 10% of the world’s oil production to raise prices that had fallen because of reduced demand for fuels as the coronavirus forced people to stay home.

Those supply cuts, paired with a demand recovery as the pandemic improved, pushed oil prices above $70 per barrel to their highest point since 2018, causing gasoline prices to spike above $3 a gallon in recent months.

OPEC+ sought to curb rising prices with its agreement last month to increase output each month by 400,000 barrels a day, beginning in August.

While that resulted in oil prices falling below $70 per barrel, gasoline prices tend to lag crude declines.

The national average for a gallon of gas in the U.S. is currently $3.185, according to AAA, up from $3.144 a month ago. Over the last year, prices are up by just over $1.

The White House has been aggressive in trying to limit the political liability of high gas prices as it seeks to address criticism that Biden’s big spending proposals are leading the country into a prolonged inflationary period.

For example, administration officials hit the airwaves aggressively to temper fears when gas prices spiked in May after the hack and shutdown of the Colonial Pipeline — responsible for nearly half of the East Coast’s fuel supply.

Author: Josh Siegel

Source: Washington Examiner: Biden asks global oil cartel OPEC+ to boost production as pump prices spike