The midterm elections are weeks away and OPEC+ is threatening to cut oil production. That’s not good news for you, the consumer; it’s also not good news for President Joe Biden and his fellow Democrats.
Biden’s bump up in the polls over the past few months tracked declining gasoline prices. For nearly 100 days, gas prices went down. They peaked at a record high of more than $5 per gallon in June and reached a low of $3.67. Now, at $3.80, they have begun to head back up.
According to the Real Clear Politics average of polls, Joe Biden’s “disapprove” rating peaked at the end of June at 57.3% and dropped to 53.1% in mid-September, along with the slide in gasoline prices. Since then, the percentage of voters expressing disapproval of Biden has inched higher, and GOP chances are looking brighter.
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Declining gasoline prices and Biden’s improving popularity cheered Democrats, who began to dream that voters would overlook the declining economy, soaring inflation, our open border and rampant crime, and instead choose representatives campaigning on climate change and abortion policy.
They knew better. They knew: “It’s the economy, stupid”, as James Carville so bluntly put it, and that gasoline prices were key.
That’s why Biden’s White House quietly decided to continue delivering oil from our Strategic Petroleum Reserve well past Election Day, even though the withdrawal program was meant to end October 31.
That’s also why a group of Democrat lawmakers wrote a letter begging the White House to continue releasing oil from the SPR through year-end “at a minimum”, in order “to ensure that gasoline and oil prices continue their downward trajectory…”
Unhappily for Democrats (and all Americans) OPEC+ is meeting this week and is reportedly set to cut oil production more than one million barrels per day in order to boost prices. If OPEC+ follows through on what the Wall Street Journal describes as its “most drastic reduction of production since the pandemic”, it will offset Biden’s SPR withdrawals and push oil prices higher.
Here at home, rising oil and gasoline prices would fuel already-high inflation, forcing the Federal Reserve to press ahead with even more interest rate hikes, thus weakening our economy and our stock market.
The impact would be worldwide; in the EU, rising energy costs are thrusting the region into recession.
In short, OPEC’s decision could prove disastrous for the entire world, and for Joe Biden.
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Why would OPEC+ plunge the world into even greater economic chaos? Simple: Russia wants more money to fuel its war with Ukraine and Saudi Arabia, the de facto head of OPEC+, is punishing Joe Biden.
Russia’s economy is suffering from the rising costs of its unprovoked war with Ukraine, the cut-off of natural gas exports to Western Europe and the widespread sanctions levied on the country’s institutions and banks after it invaded its neighbor. Though its oil exports dropped after the war began, Russia’s revenues held up as oil prices soared midst the turmoil to more than $100 per barrel.
The oil price drop to around $85 per barrel more recently has hit Russia’s economy hard, pushing the federal government budget into a deficit and causing the stock market to sell off sharply. Putin desperately needs higher prices.
As to Saudi Arabia, remember that famous fist-bump? The greeting chosen by Joe Biden to virtue-signal that he would absolutely not deign to shake hands with Mohammed bin Salman, Crown Prince of Saudi Arabia, even as he begged OPEC’s de facto head for more oil?
That fist-bump has cost him (and you) already as MBS, leader of OPEC’s major swing producer, declined to raise output in defiance of Biden’s pleas. The price tag could grow in the months ahead if he agrees to cut output.
Since he became president, Joe Biden has gone out of his way to insult Saudi Arabia’s MBS, who just recently was elevated to the post of Prime Minister by his ailing father, King Salman bin Abdulaziz. Biden told the Saudis early on he would not speak to MBS, whom he blamed for the murder of the journalist Jamal Khashoggi.
In addition, Biden canceled our military aid to the war in Yemen and rescinded the terrorist organization designation applied to the Houthis by President Trump, emboldening that group to step up their attacks on Saudi Arabia.
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More recently, Biden continues to mulishly pursue a nuclear deal with Iran, Saudi Arabia’s bitter enemy. The effort to restore the Obama-era JCPOA flies in the face of ongoing malevolent activities by Iran and in spite of our very real self-interest in courting Saudi Arabia. Just in the past few days, Iran launched missiles against Kurdish fighters in Iraq, killing among others an American national.
In another sign of its appeasement of Tehran’s mullahs, the Biden White House seems determined to stand by while the most consequential protests in decades rock Iran. Despite a supposed commitment to women’s rights, Joe Biden is unmoved by the tens of thousands streaming into the streets all over the country to protest the brutal beating death of a woman who dared to defy the morality police.
We could, and should, do more.
OPEC+ production has recently fallen short of its stated targeted amount. It may be that a proposed cut will only reflect existing output shortfalls, and not move markets. But the Biden White House has made us vulnerable to the whims of foreign (and some unfriendly) producers; that is inexcusable.
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Joe Biden should undertake an “all hands on deck” effort to raise U.S. oil and gas production, which would lower global oil prices and boost our economy. But that would offend Democrat climate zealots who are willingly putting out country at risk.
In the midterm elections, let us hope Americans figure this out and vote for renewed and achievable energy independence, and for security.
