What Joe Biden can do against OPEC

Dhe announcement by OPEC that, in coordination with Russia, the quota for daily crude oil production would be reduced by 2 million barrels (159 liters each) brought the American President Joe Biden politically and economically in trouble. High oil prices are jeopardizing the Democrats’ electoral success in the upcoming American midterm elections. They also testify that the United States has lost influence over its key ally, Saudi Arabia, and it is the country that sets the tone in OPEC. Biden’s trip there in the summer did not bring the desired success.

Frustration runs high in the White House, as evidenced by the joint statement by Chief National Security Advisor Jake Sullivan and Economic Adviser Brian Deese. Biden’s top advisors not only fear that gasoline prices in America could rise again, but also that emerging and developing countries in particular will bear the burden of the OPEC shoulder the intended price increase with difficulty.

The American government’s options for action are limited. She announced that she would release another 10 million barrels from the Strategic Petroleum Reserve next month and release more amounts if necessary. The 10 million barrels are part of the release program of 180 million barrels that Biden announced in March, not without success: Since early summer, gasoline prices have fallen from $5 to $3.30 a gallon (3.785 liters).

Bush blocked an Opec law

The US Treasury Department estimates that around 40 cents of the price cut per gallon can be attributed to Biden’s release, only: The Strategic Petroleum Reserve has limited capacity. If the caverns and deposits are completely filled, the stock is 713 million barrels. The stock has currently shrunk to 416 million barrels. This shows that the liberalization policy cannot be sustained to curtail OPEC’s pricing power.

Biden’s top advisors are therefore also threatening OPEC with Congress. For almost two decades, politicians from both parties have been working on a law with the catchy acronym NOPEC that would subject OPEC states to American antitrust law. The American Attorney General could then be OPEC, individual countries or state oil companies sue in US federal court.

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