Joe Biden instructed the Federal Trade Commission (FTC) to investigate whether oil and gas companies are breaking the law. Given that the FTC is run by the now tough leftist Lina Khan, it is logical to assume that violations will be found.
The President does not understand how the costs of the oil and gas industry can be reduced and the prices of its products rise. Well, costs have been cut due to the fact that at the peak of the epidemic, companies froze exploration activities, laid off some employees, suspended travel trips, increased salaries and paid bonuses to the remaining employees. The significant difference in price between the cheaper straight-run gasoline and the more expensive recycled and retail gasoline, to which Biden drew attention, is explained by the high cost of fuel additives; in the context of economic recovery, supply simply does not keep up with demand. There is nothing strange in the resulting price delta, this phenomenon is quite common. Gas station prices are rising in line with oil prices.
In October, a gallon of gasoline cost an average of $ 3.38, a barrel of oil $ 81.48; last time such prices were observed seven years ago. The volume of oil production in America today is 11.4 million barrels per day, which is significantly more than a year ago, but below the pre-pandemic level of 13 million.
In part, hydrocarbons are also becoming more expensive because of Russia’s geopolitical games and the openly hostile policy of the Biden administration towards domestic producers of fossil energy resources. Elementary Watson. Suffice it to recall that at the very beginning of his reign, Biden banned the expansion of the Keystone XL pipeline, which pumps bituminous oil from Alberta to Nebraska, temporarily outlawed drilling in the vast expanses of northeastern Alaska and positioned himself as an enemy of oil production by hydraulic fracturing. However, the owner of the White House pretends not to understand what is happening. “We are oil and gas, only the lazy does not scold us,” insiders lament. The demagoguery to which politicians are pushed by their low ratings knows no bounds.
Not from a good life, Baydenovtsy recently agreed to auction licenses for the exploitation of oil and gas fields in the Gulf of Mexico.
Biden, in addition, blamed the oil and gas giants and, in particular, Exxon Mobil, for the fact that they are now massively buying up their shares. This means that their profit is normal. The profitability of the giants has really recovered today after last year’s collapse, and they are buying shares so that they do not go to all kinds of “green” investors who, encouraged by the same Biden and his team, acquire large blocks of securities of oil companies and from a position of strength are trying dictate a business development strategy to them.
Efforts by the White House to persuade OPEC and the cartel’s allies to increase production had no effect. Recently, the administration decided to put into circulation from the reserve 50 million barrels of oil. China, India, Japan, South Korea and Great Britain will take similar steps in order to bring down prices for “black gold” in coordination with the United States. The announced measure is unlikely to please OPEC, and the cartel may now decide not to increase production. Biden’s employees plan to return 32 million barrels to storage facilities over time.
Experience shows that the impact of such maneuvers on lower prices is, at best, transient.
Biden and oil and gas: from a sore head to a healthy one