President Joe Biden is playing a dangerous game. His policies have decreased America’s energy independence, and his latest move could spark tension with OPEC.
Well, here we go…
Politics are once again changing the economic landscape. President Joe Biden is trying to ease the pressure that Americans are feeling at the gas pump by releasing some of the nation’s oil reserves.
Before we get into the repercussions of this strategic move, can we just admit this whole thing is… well, strange?
Former Presidents Obama and Trump implemented or extended policies that finally gave America energy independence, ensuring that we had all the oil we would ever need.
However, that’s changed under President Biden.
His decision to end fracking leases on federal land may have been the death knell for America’s oil supremacy (yes, we were the TOP producer of oil in the world from 2016-2021), and in the months that followed, we watched the price of gas soar with each energy-based decision this administration has made.
America has been watching gas prices rise at breakneck speeds, shooting up 50% over the past year with no signs of slowing.
But as the release of the oil reserves begins (again, something he wouldn’t have to do if he’d re-institute fracking leases on federal land), Biden is promising that prices at the pumps will drop soon enough.
Is Releasing The Oil Reserve A Good Decision?
However, this decision was made after Biden asked OPEC nations to do more to combat elevated energy prices by trying to appeal to their more humanistic side, saying that it would help the world to recover from the pandemic lockdowns.
Well, OPEC predictably declined.
In response, to help alleviate some of the pressure that his administration is getting from angry voters, Biden announced that he’d be releasing 50 million barrels-worth from the strategic oil reserve over the next few months.
This is the move that could put him in direct competition with the OPEC nations because high oil prices only help their goals.
They want to make back some of the profits they lost out on with America being oil independent over the past five years. That means the steps Biden is taking could trigger an oil war between OPEC and non-OPEC nations.
If OPEC continues to pump at expected levels, then the additional supply from the reserves would lower oil prices, which is what the Biden administration is hoping…
But OPEC could CUT down on production in order to keep prices up or even push them higher.
World War III: The Oil Conflict?
The Eurasia Group revealed how this could be a dangerous game, saying, “This raises the specter of a disruptive standoff that pits major producers led by OPEC+ against big consumers, led by the US. Countervailing moves by each side are likely to lead to increased volatility, producing seesawing oil prices and added uncertainty.”
So, as investors, what does this tell us?
Should we be looking to get back into crude?
The answer to that question depends on your own financial strategy—but I have to tell you that it wouldn’t be a bad idea.
Adam O’Dell and Charles Sizemore have already started putting some options on their radar.
So, if the experts are already preparing…shouldn’t we?
We’d be crazy not to.
Do you know who wins in an oil war?
Investors, that’s who!
“Oil creates the illusion of a completely changed life, life without work, life for free. Oil is a resource that anesthetizes thought, blurs vision, corrupts.”
― Ryszard Kapuściński