Oil prices soared after Joe Biden gave in to public pressure and banned Russian oil imports into the United States. The lack of heavy oil immediately impacted diesel prices, which flew through the roof. In desperation, the Biden administration reached out to OPEC and Venezuela to find extra oil supplies to make up for the lack of that heavy.
And while that seems like a one-way trip for oil prices, we are pulling back a bit today from the high on talk of another Russian-Ukraine ceasefire and the possibility that the International Energy Agency is releasing oil from global strategic reserves immediately to calm rising energy prices.
The Wall Street Journal reported that the Crown Prince bin Salman in Saudi Arabia and the U.A.E. failed to return the President’s call while Biden is blaming Putin for the increase in oil and gasoline prices.
The Journal wrote that the White House unsuccessfully tried to arrange calls between President Biden and the de facto leaders of Saudi Arabia and the United Arab Emirates as the U.S. was working to build international support for Ukraine and contain a surge in oil prices.
Saudi Crown Prince Mohammed bin Salman and the U.A.E.’s Sheikh Mohammed bin Zayed al Nahyan declined U.S. requests to speak to Mr. Biden in recent weeks.
A U.S. official reported the planned discussion between Saudi Prince Mohammed and Mr. Biden:
“There was some expectation of a phone call, but it didn’t happen. It was part of turning on the spigot [of Saudi oil].”
The policy by Joe Biden should make Saudi Arabia a pariah state and not show more support for the UAE when Iran has attacked them, and the fact that they are pushing this Iranian nuclear deal is not endearing them OPEC. OPEC restraining production is why Biden has failed to bring down rising oil and gas prices. It makes one wonder why he did not have the same influence over OPEC plus that his predecessor President Trump had.
The New York Post reported that Russia has again claimed it would hold to a ceasefire Wednesday morning to allow the safe passage of Ukrainians fleeing from Kyiv and four other major cities. The promised humanitarian corridors from the capital, along with Chernihiv, Sumy, Kharkiv, and Mariupol, come as throngs of citizens remain trapped in those cities amid ongoing attacks from Russia in the area.
It remains to be seen if Russia would keep its word, but under a similar promise Tuesday, the aggressors were accused of fresh war crimes for shelling scores of refugees trying to evacuate along the safe routes. Yet the oil market believes it and sold oil on the report.
The API was very bullish and even more bullish if you factor in the Russian oil import ban. The API reported that diesel supply fell by a whopping 5.485 million barrels. That looks even larger without those heavy Russian oil imports. The API reported that crude was up 2.811 million barrels and gasoline down 1.988 million barrels.