Oil prices are rising, and we can thank President Biden for that.
by punish Russian tankers and producers in recent days, something they should have done more than a year ago, have seen oil prices soar because of the president, with West Texas Intermediate crude at Dec. 6 lows. That's up from $67 per barrel. Close to $80up nearly 19 percent. Strong economic indicators contributed to the rise, but Russia's suspension of exports will significantly change the situation.
Gasoline prices are also rising, 4.4% increase This poses a challenge for President-elect Donald Trump, who has promised to put a lid on inflation.
Pushing up oil prices isn't the only way Biden gleefully hammers a nail into the path to succession, but it's one of the most egregious. Biden and his team know that rising gas prices could ruin Donald Trump's honeymoon. They don't want anything more. And they know that if President Trump moves to lift these sanctions in an effort to curb oil prices, he will once again face unjustified criticism. Captivated by Vladimir Putin
This is not the only White House policy move that could dampen Trump's popularity and complicate his administration. The Biden White House is perhaps more active than it has been in the past four years, busy punishing enemies and rewarding friends in its waning weeks.
Most recently, Biden's Federal Trade Commission sued john deere (A company I dropped it recently The president's cherished DEI initiative allegedly limited customers' ability to have their tractors serviced by companies other than Deere. Additionally, the White House has committed additional funds to Spend billions of dollars on student loan repaymentseven if the court ruled that such acts were illegal. was also published Special Counsel Jack Smith's Report About the investigation into Donald Trump's alleged attempt to overturn the 2020 election. Liberal media praised Smith's argument that Trump would have been convicted at trial. But what else was he going to say? Was he going to consider his work a waste of time? By its nature, the report was one-sided and inconclusive.
Additionally, the Securities and Exchange Commission: Just sued Elon MuskThey accuse Musk of failing to notify agents and shareholders of his purchase of Twitter stock in early 2022, and claim that hiding the stock accumulation allowed Musk to buy the company cheaply.
This is an interesting claim considering that Musk has spent a lot of money. $44 billion almost certainly excessive To buy Twitter. No one would argue that it's a bargain. his lawyer explained The violation is “an alleged failure by the administration to submit a single document,” which, if proven, would result in “a nominal penalty.” Mr. Musk, of course. We became close To President-elect Trump. Most people will see this lawsuit as a politically motivated goodbye.
But even more consequential than these last-ditch efforts to destroy President Trump or build a credible legacy are the Treasury Department's sanctions against Russian oil producers, oil field service providers, and tankers. In a statement explaining the move, Treasury Secretary Janet Yellen said: said“The United States is taking sweeping action against Russia's major source of revenue for funding its brutal and illegal war against Ukraine.” It added that this is in addition to policies adopted in 2022 to limit the prices received for foreign investors.
The Biden administration is seeking to carefully limit Russian oil exports and revenues while avoiding causing substantial increases in energy costs, a goal that is laudable but will undoubtedly result in prolonging the conflict with Ukraine. It becomes. Our NATO allies have been active partners in this delicate two-tier process. Their leaders are also politically vulnerable to rising energy costs.
Yellen and Biden should explain why they did not adopt these more aggressive measures earlier in the war. The reason is simple. This is because Biden feared the political impact of rising oil prices.
After all, record setting $5 per gallon of gas in June 2022 It was the biggest blow to Biden's popularity and approval ratings. That's why Biden abandoned 40 percent of oil stored in the U.S. Strategic Petroleum Reserve ahead of the midterm elections. He never considered the possibility that oil and gasoline prices would rise further.
Half-hearted measures taken by the Biden administration to limit Russian oil production since the start of the war have not had much of an impact. Russia's oil production is just 8% less From the month before Putin invaded a neighboring country. In January 2022, Russia produced approximately 10 million barrels per day. As of September last year (the latest available information), production had fallen to only 9.7 megabytes per day.
However, income increased due to higher export prices. international energy agency report Although “Russia's exports of crude oil and petroleum products decreased by 350,000 barrels per day last year,” revenues increased by 2 percent, amounting to $3.8 billion.
Winning a war sometimes requires making some sacrifices. Months after President Vladimir Putin sent troops to Ukraine, Mr. Biden promised the United States and its allies that he would “do the following.”squeezeIt attacked the aggressor country by denying Russia most-favored-nation status, cutting it off from International Monetary Fund and World Bank loans, cracking down on Moscow's oligarchy, and banning imports of vodka, diamonds, and seafood. There is no mention of suspending oil exports, the lifeblood of Russia's economy.
So Russia is allowed to continue exporting high levels of oil and gas, even as the West gives Ukraine hundreds of billions of dollars to prop up its economy and wage the war. China belonged to Putin willing enableran unwelcome development on many fronts, taking advantage of the discounted prices that Moscow can charge.
Biden's half-hearted handling of the Ukraine war, repeated delays in delivering needed equipment, and restrictions on Kiev's invasion have led to an impasse. If he had blocked Russian oil exports early on, convinced the American public that rising energy costs were a small price to pay for protecting themselves from Putin's adventurism, and really starved Moscow of money; The war might have already ended.
liz peakHe is a former partner at Wertheim & Company, a major Wall Street firm.
