Energy industry representatives are warning of price increases after OPEC+ nations agreed to cut oil production by 2 million barrels per day. They also say that President Biden’s policies are making the U.S. more vulnerable to such a move.
“It’s not great news for American families and businesses who are already struggling with record inflation,” American Exploration and Production Council CEO Anne Bradbury told FOX Business. “Oil, gas, refined products are all global commodities and all are priced on a global marketplace.”
“When you’re reducing supply from that global marketplace, the laws of supply and demand mean that prices are going to go up,” she said.
Energy Workforce and Technology Council senior vice president of government relations Tim Tarpley told FOX Business that the uncertainty caused by the OPEC+ production cut could be “more important than the actual number of barrels of oil they are taking off the market” and could lead to price increases.
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A solution to that uncertainty, Tarpley said, is for the U.S. to step up its domestic production and reassure its allies. But he said Biden’s actions on energy, particularly when he first took office, are taking the country in the wrong direction.
“It sent signals that the United States was not necessarily going to produce the resources we have,” he said. “There’s things we can do domestically to produce more oil and gas and to provide certainty to our allies and let them know, ‘Hey, we are a reliable partner. … You don’t have to rely on OPEC+, you don’t have to rely on Russia.'”
Wesley Hunt, a Republican congressional candidate in a Houston-based district who associates himself closely with the energy companies in his city, was more frank.
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“When you play stupid games, you win stupid prizes,” Hunt told FOX Business. “We cut off the Keystone XL Pipeline. We’re stifling our own growth. … And what’s going to happen to us here is you’re going to see prices go up.”
The White House on Wednesday touted Biden’s use of the Strategic Petroleum Reserve to add supply and its efforts to ask U.S. energy companies to cut their prices.
“At the President’s direction, the Department of Energy will deliver another 10 million barrels from the Strategic Petroleum Reserve to the market next month, continuing the historic releases the President ordered in March,” said National Security Advisor Jake Sullivan and National Economic Council Director Brian Deese in a statement. “The President is also calling on U.S. energy companies to keep bringing pump prices down by closing the historically large gap between wholesale and retail gas prices.”
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But Hunt attacked Biden for a recent trip to Saudi Arabia to ask that nation to increase its oil production in a bid to bring down domestic gas prices — that effort appears to have failed.
“It’s a total slap in the face for our entire country,” Hunt said of the move by OPEC+ to reduce oil production. “Everyone knows this is the weakest that we have been in the last 40 years since Jimmy Carter. … This administration is just not believable. They just literally don’t respect us.”
“We remain a bit puzzled by why the administration continues to ask foreign suppliers for additional supply while pursuing policies that make it harder to produce energy here in the United States,” Bradbury added.
American Petroleum Institute President Mike Sommers also attacked Biden for “urging foreign regimes for more oil” over increasing U.S. production. And Tarpley said Biden should have come to the Permian Basin in Texas to visit oil producers there instead of traveling to Saudi Arabia.
Though it can take time for energy companies to ramp up production, Tarpley said that a change as recently as the start of the Russia-Ukraine war could have made a difference.
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“The administration is saying, ‘Oh well, if we took these steps, it would take so long for production to kick in … it’s not even worth trying.’ I reject that,” he said. “If we had taken some positive steps … when this real crisis started, we would already be seeing some significant production increases.”
Average gas prices in the U.S. are now $3.78 per gallon, according to the Energy Information Administration. That’s down from their peak of more than $5 per gallon this summer but still significantly up from about $2.38 per gallon when Biden took office.
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