Energy Report: The Wrong Guy

Pump Jack, Oilfield, Oil, Fuel, Industry, Petroleum

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The Joe Biden administration, for the first time since taking office, finally reached out and confronted OPEC that has been instrumental in sharply rising oil prices during the first few months of his administration. Energy Secretary Jennifer Granholm tweeted that, “I had a productive call with Saudi Energy Minister Abdulaziz bin Salman al-Saud today. We reaffirmed the importance offers of international cooperation to ensure affordable and reliable sources of energy for consumers.” The only problem here is that she is talking to the wrong guy and the Biden infrastructure plan is the exact opposite plan that will bring us affordable and reliable sources of energy for consumers.

The man that has the power to change Saudi Oil policy is Crown Prince Mohammed bin Salman bin Abdulaziz Al Saud, which is someone that the Biden administration refuses to talk to because of his alleged ordered killing of Saudi journalists and U.S. citizen Jamal Khashoggi. So I doubt that this call will have any impact on the Saudis relenting on their voluntary 1 million barrel a day production cut.

Oil prices freaked out after the OPEC Plus panel ended without a policy decision. Yet the lack of a decision does not mean that OPEC Plus is not going to agree to roll over cuts because they will. OPEC lowered its demand expectations so any pullback from a rollover of cuts would hurt prices and it is unlikely they will allow that to happen. Lockdown announcements in Europe give the cartel the justification that it needs. The Saudis are pressuring members on compliance and the meeting ended asking for compensation cut plans from cheating OPEC members that will be submitted today. The only question I think will be whether they roll over the cuts for one month or two.

Energy Secretary Jennifer Granholm who has a disdain for fossil fuels and the fossil fuel industry, also tweeted about her conversation with the Saudi Oil Minister, “We also discussed closer collaboration to solve common challenges and develop renewable energy sources, increase efficiency, reduce methane in oil and gas production, and develop clean forms of hydrogen to combat climate change.” The Saudis are moving big into the hydrogen space.

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