Global oil markets are screaming they need more oil as the U.S., along with Europe, may look to ban Russian oil for the invasion of Ukraine. Oil prices soared on Monday after the Secretary of State made the announcement.
The only hope to replace that oil in the short term and avoid a global recession is if Biden flies to Saudi Arabia and begs Crown Prince bin Salman for more oil. Sadly, and pathetically, that may happen. Axios reported that Biden’s advisers are discussing a possible visit to Saudi Arabia this spring to help repair relations and convince the Kingdom to pump more oil.
The Biden administration mismanaged relations with Saudi Arabia. Biden’s clumsy foreign policy vowing to make a long-time U.S. ally a pariah state failed to understand the complex strategic delicacies of this relationship in the Middle East and the world, especially regarding oil. This is even more important if it is your goal to restrict U.S. oil production. No one likes Saudi Arabia or Crown Prince Bin-Salman, but there were more ingenious ways to handle this.
This weekend, Biden officials went to Venezuela to meet with the government and President Nicolás Maduro. The sanctions on Venezuelan oil forced U.S. refiners to import record amounts of Russian oil. So now the U.S, may decide to lift sanctions on the Maduro regime to keep U.S. refiners going.
Biden’s other hope is an Iranian deal that he staked his foreign policy on, trying to cut a deal with the terror state, and now that is falling apart. Reuters reports that Russia’s demand for written U.S. guarantees that sanctions on Moscow would not harm Russian cooperation with Iran is “not constructive” for talks between Tehran and global powers to revive a 2015 nuclear deal, a senior Iranian official said on Saturday. The announcement by Russia, which could torpedo months of indirect talks between Tehran and Washington in Vienna, came shortly after Tehran said it had agreed on a roadmap with the U.N. nuclear watchdog to resolve outstanding issues that could help secure the nuclear pact.
This nightmare scenario was created by Biden’s foolish and short-sighted energy policies that have restricted investment and discouraged U.S. oil production. Even as the signals were clear that the clampdown on U.S. energy was having a detrimental effect on the price of crude oil, as well as geopolitical stability, the administration continued to double down on its disastrous policies leaving the country and the world in a very dangerous position. All the apologists for the Biden administrations’ policies are making the rounds saying he did such a great job uniting Europe. How did he do that? By allowing a war.
Russia’s cowardly attacks on civilians are a pathetic excuse for any country on the map, and it is hard to see how they come back from this. Their economy will be in shambles, so they are going to be desperate and very dangerous.
The oil test of long-term resistance near $130.00 is historically significant. If we break above that level, we should test the all-time price for oil at 147.27.
U.S. gasoline prices and products are also soaring, squeezing the U.S. poor and middle class. AAA says that the national average hit $4.06.5 a gallon. Diesel fuel hit $461.4 a gallon, killing businesses and truckers.
We now have an energy crisis, but Biden may next have to deal with a food crisis. Wheat is limited up again, and it is possible that Ukraine will not get a crop planted. The market is pricing in wheat shortages, which could spread to other ag products. Biden could get ahead of this by lifting CRP restrictions allowing farmers to plant more, so the poor do not starve as they are already facing record-breaking food prices.
CRP is a land conservation program administered by the Farm Service Agency (FSA). In exchange for a yearly rental payment, farmers enrolled in the program. USDA noted landowners enrolled 4.6 million acres in CRP in 2021, including 2.5 million in the largest Grassland CRP signup in history. There are currently 22.1 million acres enrolled in CRP, and USDA wants to reach 25.5 million acres — the statutory cap for the Fiscal Year 2022.
Biden needs to move in this situation to avoid starvation. The environment is important, but human lives are even more important.
It is time for the Biden administration to reverse course and end its war on the U.S. oil and gas industry. It is also time for a Manhattan project to support the U.S. oil and gas industry to raise the output of oil and gas and move to avert a financial crisis. The world is watching.