Biden Tackles High Gas Prices More Vigorously

President Joe Biden on Wednesday called on U.S. companies to increase oil production and confirmed that the U.S. will continue to tap into its strategic reserves in an effort to stabilize prices at the pump.

Share:

This announcement, in a tense electoral context, comes two weeks after the decision, seen as a slap in the face in Washington, of Opep and its allies, including Russia, to lower their oil production quotas.

Fearing that this could result in a spike in fuel prices just before the November 8 ballot that is crucial to the end of his first term, Biden stressed what is at stake. “Families are hurting,” he said in a serious tone, in an address to the White House, aware that high inflation is his Achilles’ heel, exploited to excess by his Republican rivals.

Biden criticizes oil companies

It is urgent to increase U.S. oil production in a reasonable way,” the president said. An increase in domestic production that must take place “without delaying our transition to clean energy”, he wished however.

Mr. Biden also reiterated his criticism of certain industrial players in the hydrocarbon sector.

“Refiner profits are double the usual. And distributor margins are more than 40% above the norm,” he tweeted in the wake of his press conference.

But the strongest measure was the confirmation on Wednesday that the United States would draw an additional 15 million barrels from its strategic reserves to try to relieve the price of black gold. This new drawdown, which will be carried out in December, is the final tranche of the program announced in the spring by the U.S. head of state and which planned to free up a total of 180 million barrels to deal with the surge in prices associated with the invasion of Ukraine.

Replenish reserves

At the same time, the U.S. President plans to put in place a mechanism to replenish the strategic reserves over the long term. The U.S. government will start buying back crude oil when the price of West Texas Intermediate (WTI), the U.S. benchmark, falls to between $67 and $72 per barrel.

This measure, which is supposed to send a clear signal to the markets, is also intended to encourage the major national companies to boost their production.

The administration plans to negotiate pre-agreed price buyback contracts through an auction process, which will limit the vagaries of price volatility, a government official said.

Since the beginning of September 2021, the United States has extracted more than 212 million barrels from strategic reserves, which are at their lowest since June 1984. Never before has a president released such quantities since the reserves were created in 1975.

While the price of regular gasoline is down 22% from its peak in mid-June, it is still 16% higher than the same time last year. As for diesel, it has only fallen moderately since June, due to very low stocks, and costs 50% more on average than a year ago.

Petro-Victory Energy announces the completion of drilling operations for the AND-5 well in the Andorinha field, Brazil, with positive reservoir results and next steps for production.
The Colombian prosecutor’s office has seized two offices belonging to the oil company Perenco in Bogotá. The company is accused of financing the United Self-Defense Forces of Colombia (AUC) in exchange for security services between 1997 and 2005.
Indonesia has signed a memorandum of understanding with the United States to increase its energy imports. This deal, involving Pertamina, aims to diversify the country's energy supply sources.
VAALCO Energy continues to operate the Baobab field by renovating its floating platform, despite modest production. This strategy aims to maintain stable profitability at low cost.
An empty reservoir exploded at a Lukoil-Perm oil facility in Russia, causing no injuries according to initial assessments pointing to a chemical reaction with oxygen as the cause of the accident.
The British Lindsey refinery has resumed fuel deliveries after reaching a temporary agreement to continue operations, while the future of this strategic site remains under insolvency proceedings.
BP and Shell intensify their commitments in Libya with new agreements aimed at revitalizing major oil field production, amid persistent instability but rising output in recent months.
The private OCP pipeline has resumed operations in Ecuador following an interruption caused by heavy rains, while the main SOTE pipeline remains shut down, continuing to impact oil exports from the South American country.
McDermott secures contract worth up to $50 million with BRAVA Energia to install subsea equipment on the Papa-Terra and Atlanta oil fields off the Brazilian coast.
Saudi Aramco increases its oil prices for Asia beyond initial expectations, reflecting strategic adjustments related to OPEC+ production and regional geopolitical uncertainties, with potential implications for Asian markets.
A bulk carrier operated by a Greek company sailing under a Liberian flag suffered a coordinated attack involving small arms and explosive drones, prompting an Israeli military response against Yemen's Houthis.
The Canadian government is now awaiting a concrete private-sector proposal to develop a new oil pipeline connecting Alberta to the Pacific coast, following recent legislation intended to expedite energy projects.
Petrobras is exploring various strategies for its Polo Bahia oil hub, including potentially selling it, as current profitability is challenged by oil prices around $65 per barrel.
Brazilian producer Azevedo & Travassos will issue new shares to buy Petro-Victory and its forty-nine concessions, consolidating its onshore presence while taking on net debt of about USD39.5mn.
Major oil producers accelerate their return to the market, raising their August quotas more sharply than initially expected, prompting questions about future market balances.
Lindsey refinery could halt operations within three weeks due to limited crude oil reserves, according to a recent analysis by energy consultancy Wood Mackenzie, highlighting an immediate slowdown in production.
The flow of crude between the Hamada field and the Zawiya refinery has resumed after emergency repairs, illustrating the mounting pressure on Libya’s ageing pipeline network that threatens the stability of domestic supply.
Libreville is intensifying the promotion of deep-water blocks, still seventy-two % unexplored, to offset the two hundred thousand barrels-per-day production drop recorded last year, according to GlobalData.
The African Export-Import Bank extends the Nigerian oil company’s facility, providing room to accelerate drilling and modernisation by 2029 as international lenders scale back hydrocarbon exposure.
Petronas begins a three-well exploratory drilling campaign offshore Suriname, deploying a Noble rig after securing an environmental permit and closely collaborating with state-owned company Staatsolie.