As President Biden and Russian President Vladimir Putin prepare for their call, critics say it may be too late to temper the former KGB officer as far as the world’s oil supply is concerned.
Putin has gradually been exercising his dominance, with the help of the United States, over the global petroleum market and possibly empowering the Russian leader to invade Ukraine.
Last week, the Biden administration sent diplomats to the OPEC Plus countries to try to smooth over relations with the cartel after Biden blamed it for inflation and rising energy costs. The cartel rightly fired back and suggested that America could increase production on our own shores if it wanted to.
Saudi Arabia and Russia felt the U.S. unfairly blamed them for their energy policies.
This followed Biden’s move to release oil from the strategic petroleum reserve, which was viewed as a shot across the bow to the OPEC Plus cartel, and from a diplomatic standpoint it backfired by straining the relationship between OPEC and the United States even more than it already is.
The strategic blunder, considered a short-term panacea, created a situation where OPEC Plus and Russia was tempted to respond with a production cut war with the United States. It was a war that we would lose because there is not enough oil in our strategic petroleum reserve to compete with OPEC if it decided to take millions of barrels of production off the market.
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Traders called Biden’s bluff, bidding up oil prices following the move. While prices have since ticked lower falling into a bear market, many believe the tap was too little to have the desired long-term impact.
While Americans may enjoy a slight reprieve from rising gas prices, which hit a seven-year high, the impact is likely to be short-lived.
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Phil Flynn is senior energy analyst at The PRICE Futures Group and a Fox Business Network contributor. He is one of the world's leading market analysts, providing individual investors, professional traders, and institutions with up-to-the-minute investment and risk management insight into global petroleum, gasoline, and energy markets. His precise and timely forecasts have come to be in great demand by industry and media worldwide and his impressive career goes back almost three decades, gaining attention with his market calls and energetic personality as writer of The Energy Report. You can contact Phil by phone at (888) 264-5665 or by email at pflynn@pricegroup.com.
