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Bashing Exxon Profits, meeting with Saudi Prince

  • Biden has few choices to cut gas prices and avert a political annihilation.
  • He is betting big by beating Exxon and traveling to Saudi Arabia next month.
  • “Begging MBS for oil will not reduce gas prices,” the rep said. Ro Khanna from California in an interview.

President Joe Biden is staring down at a political annihilation within a few months.

An increase in oil and gas prices threatens to give the Democrats a decisive defeat in the mid-term period in November. The national average for a gallon of regular gasoline rose above $ 5 last weekend for the first time. This is a jump of 10 percent from a month ago, which reflects the huge demand from consumers that exceeds the available supply of oil, along with severe aftershocks in the energy markets from the war in Ukraine.

The gloomy political outlook for the White House was reinforced by an inflation report that came in worse than many economists expected. It showed that prices of groceries, flights and rents rose at the fastest pace in four decades. Biden has since doubled its promise to fight rising prices and make it the highest domestic priority.

But the rise in petrol prices underpins the current inflation spiral. It burdens companies with larger bills for electricity, flights and shipping, and raises prices across the board for Americans. There appear to be few options left for the White House to reverse the supply crisis. It has already committed to emitting one million barrels per day from the strategic petroleum reserve in May, easing regulations for ethanol fuels and trying to empty gates.

“President Biden basically uses the entire package of tools available,” Jonathan Elkind, a senior researcher at the Center on Global Energy Policy at Columbia University, told Insider. “It seems to me that the Biden administration has done many of the things that make sense.”

But these moves failed to provide relief at the pump, and it made Biden make a big effort with gas prices climbing endlessly in sight. He has basketball Exxon and reprimanded other major oil companies for driving up huge profits in a letter, which signals a more aggressive approach to a sector that he urges to quickly increase production.

He is ready to face Saudi Arabia’s Crown Prince Mohammad Bin Salman in July, despite promising to make Saudi Arabia an international pariah over the assassination of Jamal Khashoggi, a prominent critic of the Saudi royal family and a journalist who lived in USA.

It remains to be seen whether going after a bogeyman in the form of Big Oil and enjoying himself in the form of a dubious ally will be enough to tamper with gas prices and prevent Democrats from losing one or both chambers of Congress this fall.

Democrats are not comfortable approaching Saudi Arabia for more oil

Ron Wyden Schumer

Senator Debbie Stabenow (D-MI), Senator Ron Wyden (D-OR), Senator Majority Leader Chuck Schumer (D-NY) and Trade Secretary Gina Raimondo are attending a press conference on supply chain issues.

Joshua Roberts / Getty Images

The possible image of Biden shaking hands with a Saudi leader who is the reported mastermind of Khashoggi’s assassination is enough to arouse unrest and criticism among his democratic allies.

Sen. Tim Kaine from Virginia told Insider that he thought the meeting was a “bad idea”, adding that it was his “intuition” that the president’s trip was at least partly meant to get Riyadh to increase oil production.

“Begging MBS for oil will not reduce gas prices,” the rep said. Ro Khanna from California, a prominent House progressive, to Insider. He added that Biden should establish conditions such as pressuring the Saudi government to lift its devastating blockade of Yemen.

“I see very little evidence that the Saudis are going to lower gas prices,” Sen. Ron Wyden of Oregon said Wednesday. “I see a lot of evidence of their horrific human rights violations.”

Riyadh has very limited room to increase oil production – known as “reserve capacity” – and analysts say that even if Saudi Arabia pumped more crude oil, it could still fail to reduce rising gas prices. “It’s not like throwing a switch,” said Elkind. “It’s not that it will immediately affect things.”

Some force the Biden administration to think outside the box. Skanda Amarnath, CEO of the left-wing think tank Employ America, argues that the federal government should briefly guarantee the demand for oil producers among other administrative maneuvers and prioritize clean-energy initiatives in the long run.

“It feels difficult for Democrats to talk about doing things that are in a way industry-friendly,” Amarnath told Insider. “But there are actually things if you do them right, you will prevent the oil price from crashing and get this boom-bust cycle back.”

“There is nothing that the president controls less than gas prices”

Gas prices above the $ 6 dollar mark will be displayed at a gas station in Sacramento, California, Friday 27.  May 2022.

Gas prices are at an all-time high of over $ 6 in California.

Rich Pedroncelli / AP

Experts say the White House is almost at the mercy of the troubled global energy markets that have been severely disrupted by the war in Ukraine. “There is nothing that the president controls less than gas prices and nothing that people want him to control more than gas prices,” Jason Furman, a former top economist in the Obama administration, told Insider.

Congress Democrats are struggling to hang on to their thin majorities. Republicans dismiss Democrats as tax-and-use liberals who exacerbated inflation with the stimulus law last year and halted domestic energy production.

Some Democrats blame large oil companies for bringing in huge profits at the expense of Americans who are being pushed at the gas station. Wyden will unveil a plan that will give oil companies a 21% additional tax on profits considered high, along with taxing companies that buy back their shares.

“You have Big Oil doing so incredibly well under the federal tax code at the expense of the consumer,” Wyden told Insider, adding that he believes his move will “tie in” with people. Separate polls from the left-leaning Groundwork Collaborative and The Washington Post show that a majority of voters blame oil companies trying to profit from the rise in gas prices.

“The profits are four times what they were before the war in Ukraine,” Lindsay Owens, CEO of Groundwork Collaborative, which conducted extensive research on the subject, said in an interview. “The oil company’s executives bring in large profits and boast about it to shareholders in revenue calls.”

Sens. Bernie Sanders of Vermont and Sheldon Whitehouse of Rhode Island also issued their own proposals for unexpected taxes. These are modeled on recently established programs in Italy and the UK that provide checks to the poorest families.

The Biden administration has kept the door open for an unexpected profit tax as well. But some liberal and conservative economists criticize unexpected taxes as potentially inflationary and detrimental to efforts to increase crude oil production.

“The Wyden plan will in part be passed on to consumers in the form of higher prices and will discourage production,” said Furman. “That’s not the right approach.”

“I think the fact that the Biden administration is floating an unexpected wealth tax or saying they’re going to consider it shows that they are in debt-shifting mode, not really constructive mode,” said Donald Schneider, deputy chief of US Policy at Piper Sandler and a former Republican. assistant from House, told Insider.

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