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Biden Orders 50 Million Barrels of Oil Released From Strategic Reserve
In Bid to Cool Surging Prices
BY TOM OZIMEK
November 23, 2021
Crude oil storage tanks are seen in an aerial photograph at the Cushing oil hub in Cushing, Okla.,
on April 21, 2020. (Drone Base/Reuters)
President Joe Biden on Nov. 23 ordered 50 million barrels of oil released from the nation’s strategic petroleum reserve (SPR) to help cool surging energy costs and ease pain at the pump.
“American consumers are feeling the impact of elevated gas prices at the pump and in their home heating bills, and American businesses are, too, because oil supply has not kept up with demand as the global economy emerges from the pandemic,” the White House said in a Nov. 23 statement.
Crude oil prices have surged to seven-year highs, with global demand seeing a sharp rebound from the pandemic lows. Republicans have blamed Biden’s policies—such as nixing the Keystone XL pipeline project and freezing new oil and gas drilling leases on federal land—for contributing to rising prices.
Insisting that Biden “is using every tool available to him to work to lower prices and address the lack of supply” of oil, the White House said the U.S. Department of Energy will make available 32 million barrels of crude under an exchange mechanism from all four SPR storage sites. On top of this, another 18 million barrels will be made available by accelerating the sale of crude from the SPR under a previous congressional authorization.
“As we come out of an unprecedented global economic shutdown, oil supply has not kept up with demand, forcing working families and businesses to pay the price,” U.S. Secretary of Energy Jennifer M. Granholm, said in a statement.
The White House said the release of the reserves was made in concert with other releases from strategic reserves by China, India, South Korea, Japan, and Great Britain.
Reacting to the White House announcement, House Minority Leader Kevin McCarthy (R-Calif.) said the SPR release—which represents just a few days of U.S. domestic demand—was unlikely to have a significant impact.
“President Biden’s decision to tap America’s strategic reserves—which will release just 3 days’ worth of oil onto the market—is not about a real solution to our energy crisis,” McCarthy said on Twitter.
“The real solution to your energy crisis is to let America produce the energy we have and need,” McCarthy said in a follow-on comment on Twitter.
Surging energy costs were the biggest factor pushing up October’s consumer price index (CPI), which vaulted 6.2 percent in the 12 months through October, a level not seen in nearly 31 years.
Accelerating inflation has been blamed for a sharp fall in consumer sentiment, which in November hit a decade low, according to a University of Michigan survey.
“Consumer sentiment fell in early November to its lowest level in a decade due to an escalating inflation rate and the growing belief among consumers that no effective policies have yet been developed to reduce the damage from surging inflation,” Richard Curtin, the survey director, said in a statement.
Besides becoming a key issue for many Americans, surging prices have also become a political problem for the Biden administration, with a recent CBS/YouGov poll showing that 67 percent of Americans disapprove of Biden’s handling of inflation.
The poll also showed that nearly two-thirds of Americans said the U.S. economy was in bad shape—the worst outcome since the depths of the pandemic last summer—while 84 percent of those who gave the economy a negative rating blamed inflation.
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Food prices about to soar
25 Nov, 2021 11:09
Global prices of nitrogen fertilizer are at their highest levels in over a decade. The crop nutrient’s sales amounted to $53 billion last year. Prices are at least 80% higher so far this year, according to Argus Media.
Nitrogen-based fertilizers are obtained from natural gas, and higher costs for the fuel have caused producers to slash output, driving the nutrients’ prices upward.
Farmers use nitrogen to increase production of corn, canola, wheat and other crops, applying it before the planting season. But at current prices, farmers in North America have had to delay its purchase, which could result in rush-buying next spring and leave many without the commodity, according to Daren Coppock, US Agricultural Retailers Association CEO.
Coppock says the US has enough nitrogen supplies for application before winter, but notes that given the prices “there’s going to be a lot of people who wait and see.” And “if everybody’s scrambling in the spring to get enough, somebody’s corn isn't going to get covered,” the expert warns. This could then lead to higher meat and bread prices in 2022.
According to one of the major nitrogen fertilizer producers, US-based CF Industries, the strong global demand for the crop nutrient may last at least until 2023.
CF’s Norwegian counterpart Yara International also recently warned that rising fertilizer prices could push food costs up and even lead to famine in some parts of the globe.
Major fertilizer producers Russia, China, and Turkey said they would limit exports of crop nutrients to tackle domestic rises in food prices.
Food prices soared to a 10-year high last month, hitting their peak since July 2011 and extending the 30% increase recorded last year, according to the United Nations Food and Agriculture Organization (FAO) report. The surge was led by increases in cereal crops like wheat and vegetable oils.
Of course, Canada is doing everything it can to contribute to this problem.
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EU state admits Russian counter-sanctions have caused
serious damage to trade
28 Nov, 2021 13:12
Reciprocal measures introduced by the Kremlin in response to anti-Russian sanctions have severely hit mutual trade between Moscow and Athens, with Greek exports to the country reportedly halved over the past seven years.
“Russian counter-sanctions have bashed Greek exports, which have been cut in half since 2014. This is especially the case for fresh fruit, vegetables, fish and dairy products,” Varvitsiotis Miltiadis, Greece’s alternate minister of foreign affairs, said in an interview with TASS.
According to the official, Greek manufacturers are currently ramping up their efforts to increase the share of the country’s products in the Russian market by boosting sales of other goods that are not subject to sanctions.
The Russian authorities placed an import ban on a number of food products from EU member states in 2014, after relations between Moscow and Brussels dramatically declined as a result of economic sanctions introduced by the EU against Russia. The step has drawn harsh criticism from citizens and companies in both Russia and the EU, and sparked a wave of protests among European farmers.
“Tourism is of particular importance to us since it helps to reduce the vast trade deficit we have with Russia, our traditional source of energy and grains,” Miltiadis said.
The diplomat added that Greece couldn’t welcome as many Russian visitors as it used to in recent years, due to Covid-related restrictions. However, the country’s hoteliers hope for a swift recovery in tourist numbers from Russia.
Good luck with that idea!
US trying to force Russia out of EU gas market – Serbia
29 Nov, 2021 09:16
The controversial Nord Stream 2 pipeline is still not certified and in operation because of pressure from Washington, which is trying to force Russia out of the EU gas market, the President of Serbia claimed on Sunday.
Aleksandar Vučić’s comments came just three days after he agreed to extend a gas deal with Russia that will save Belgrade around €1 billion ($1.12 billion), according to his calculations.
“The Russians have a problem that they are not talking about,” he told TV channel Pink. “Namely, there are attempts to politically squeeze them out so that they do not have gas in Europe.”
According to Vučić, the EU is short of 70 billion cubic meters of gas. Fifty-five billion of that could be provided by Nord Stream 2, if it is allowed to operate, he claimed.
Despite numerous packages of American sanctions, the controversial pipeline was completed last month. It stretches from the Russian coast through the Baltic Sea to Germany, allowing Moscow to send gas without transiting other countries. It would also make the process less reliant on third parties, thereby lowering the price. According to Washington, however, the pipeline threatens Europe’s “energy security.” Some have claimed the US is motivated by its own desire to sell liquefied natural gas (LNG) to the continent.
The use of sanctions to attack another country's economy should be a criminal act, if it isn't already. America's bullying is not going to win friends and influence people in a long, cold winter with gas shortages.
Due to issues with the German regulator and its insistence that Nord Stream 2 AG create a German subsidiary, the pipeline’s certification has been delayed. Once the formalities are completed, it could be turned on next year.
The contract for gas supplies from Russia to Serbia has been in force since 2012 and expires at the end of 2021. The price, set at $270 per 1,000 cubic meters, is considerably lower than the current spot price and has been extended for an extra six months on the same terms. Last month, LNG prices in Europe hit a record high of $1,900 per 1,000 cubic meters.
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