Forecourt costs rise 40%
during Biden presidency,
stoking fears over inflation
The Biden administration’s top energy
official yesterday blamed the Opec oil
producers’ cartel for soaring petrol
prices in the US, putting more pressure
on the group to increase crude output
ahead of a meeting later this week.
“Gas prices are based on a global oil
mar ket. That market is controlled by a
cartel. That cartel is Opec,” said Jennifer
Granholm, US energy secretary. “So that
has more say about what’s going on.”
US petrol prices have risen almost 40
per cent since Joe Biden entered the
White House, adding to anxieties about
inflation. The federal Energy Information
Administration recently forecast
winter household heating bills would
also surge this year.
Granholm’s comments to NBC’s Meet
the Press followed a briefing from a senior
administration official at the weekend
that said Biden would raise the
“short-term imbalance in supply and
demand in the global energy markets”
at the G20, whose members include
Opec linchpin Saudi Arabia.
“What’s important is that global
energy supplies keep up with global
energy demand,” said the official.
“Global energy demand has returned
almost back to pre-pandemic levels.
Global energy supplies have not.”
The White House’s calls in recent
weeks for more fossil fuel production by
Opec and Russia jar with the administration’s
efforts to lead a fight against climate
change and its tightening of regulation
in the US oil sector, where output
remains well below pre-outbreak peaks.
Granholm said ahead of the COP26
Glasgow climate summit: “These rising
fuel prices in fossil fuels tell us why
we’ve got to double down on diversifying
our fuel supply to go for clean.”
At seven-year highs of more than $80
a barrel, international and US oil prices
have more than doubled in the past
year, as the pandemic eases the global
economy burns more oil again.
Deep supply cuts by Opec producers
and partners such as Russia have also
helped push up oil prices, which during
the depths of last year’s price collapse
briefly crashed below zero. Those huge
cuts were agreed last year under pressure
from then US president Donald
Trump, who sought to restore oil prices
to protect the US oil industry. Opec and
allies have been gradually winding
down the cuts, but not quickly enough,
believe some consumer countries.
While world leaders discuss climate
change in Glasgow this week, Saudi Arabia,
Russia and other oil producers will
meet on Thursday to decide whether to increase more oil supply to the global
market.
Opec did not respond to a request for
comment.
Analysts, including Goldman Sachs,
expect Brent, the global oil benchmark,
to rise above $90 by the end of the year,
boosted by an unexpected rise in Asian
demand, as power generators stung by
soaring natural gas prices switch to
burning oil for electricity.
Granholm indicated the US also still
considered a release from the country’s
strategic oil stockpile to be among the
“tools” it could use to reduce prices, a
prospect she first raised last month.
“I’ll let the president make that decision,
that announcement,” she said.