President Biden took aim at oil companies yesterday while announcing an unprecedented release of petroleum from the nation’s reserves. Biden plans to release around 1 million barrels of oil per day over the next six months to try to reduce energy costs. Currently, the U.S. consumes about 20 million barrels of oil per day at the pump and elsewhere, ABC News reports.
At a glance
- President Biden’s administration authorized the release of 1 million barrels of oil from strategic reserves for the next six months
- The President blames three distinct factors for the gas price spikes of late: Russia, COVID-19, and greedy oil companies
- According to the President, oil companies possess the necessary permits for more federal drilling, but are using the “Putin gas hike” as a means of taking higher profits
Biden also blamed Russia’s invasion of Ukraine and the lingering economic effects of COVID-19 for the recent spike in gas prices. Trying to combat a phenomenon he calls “Putin’s price hike,” Biden told Americans “there is no firm answer” as to when prices will go down.
“Today I want to talk about one aspect of Putin’s war that affects and has real effects on the American people: Putin’s price hike that Americans and our allies are feeling at the pump. I know how much it hurts,” Biden said in a public address Thursday. “As you’ve heard me say I grew up in a family, like many of you, where the price of gasoline was discussed at the kitchen table. None of it should hinge on whether a dictator declares war.”
COVID-19 affected economic demand because of changes in travel during the pandemic, Biden asserted
Biden also touched upon fluctuations in demand during COVID-19 as a reason for the sudden spike in price. He failed to mention that the cost of all consumer goods inflated by more than seven percent this year due to massive spending bills and flat currency printing.
“When COVID struck, demand for oil plummeted, so production slowed down worldwide. Because of the strength and the speed of our recovery, demand for oil shot back up much faster than the supply. That’s why the cost of gas began to rise last year. The second root is Vladimir Putin,” he said.
The President assured Americans that gas prices would fall anywhere from “10 cents to 35 cents” at the pump. Again, though, he failed to mention any sort of long-term implications to stability that could arise from depleting national oil reserves.
Biden targeted oil companies in his address, as well
Biden then directly addressed oil companies, accusing them of limiting production in order to capitalize on Putin’s worldwide oil squeeze. He told them he’s seen “enough of lavishing excessive profits” and passing on the cost of oil to consumers; adding that the oil companies have “everything they need” and “nothing is standing in their way” to boost production.
“[Oil companies] don’t want to increase supply because Putin’s price hike means higher profits,” Biden then said.
Next, Biden encouraged Congress to tax oil companies that apply for federal drilling permits but do not increase production. He said many of the companies are sitting on idle wells across the country.
“No company should take advantage of a pandemic or Vladimir Putin at the expense of American families,” Biden said. “Production and innovation, that’s what they should do. Invest in your customers. It’s the patriotic thing to do, plus it’s good for business as well.”