Texas? North Dakota? Shale country in Pennsylvania, where Democrats look more vulnerable than ever in the upcoming Senate election? Maybe the coasts, where massive US reserves would create a strategic advantage over OPEC+ and allow us to cut off Vladimir Putin’s profits organically?
Naah. When Joe Biden needs oil to solve a political problem, the last place he turns is to America. Instead, Biden wants to cut a deal with Nicolas Maduro and let Chevron pay the Venezuelan dictator rather than create jobs and energy independence at home:
The Biden administration is preparing to scale down sanctions on Venezuela’s authoritarian regime to allow Chevron Corp. CVX 1.02%▲ to resume pumping oil there, paving the way for a potential reopening of U.S. and European markets to oil exports from Venezuela, according to people familiar with the proposal.
In exchange for the significant sanctions relief, the government of Venezuelan President Nicolás Maduro would resume long-suspended talks with the country’s opposition to discuss conditions needed to hold free and fair presidential elections in 2024, the people said. The U.S., Venezuela’s government and some Venezuelan opposition figures have also worked out a deal that would free up hundreds of millions of dollars in Venezuelan state funds frozen in American banks to pay for imports of food, medicine and equipment for the country’s battered electricity grid and municipal water systems.
Just how desperate a ploy is this? Consider this caveat from the Wall Street Journal’s sources:
U.S. officials said details are still under discussion and cautioned that the deal could fall through, because it is contingent on Mr. Maduro’s top aides resuming talks with the opposition in good faith.
Our energy policy now rests on the good faith of Nicolas Maduro, a tyrant who has reduced Venezuela from a comfortable democracy to a socialist economic disaster. Biden wants to fill Maduro’s pockets again to get himself out of political jam at home, which renders his “good faith” pretense entirely threadbare. Biden has made it clear that he needs Maduro’s oil a lot more than Maduro needs Biden’s money, and he also knows that Biden has no problem throwing generations of Venezuelans under the bus to save his own political carcass.
Biden’s not waiting around for an immediate response from Maduro either. To keep gas prices from skyrocketing before the midterm cycle finishes, the White House will drain the Strategic Petroleum Reserve of an additional 10 million barrels, bringing it to its lowest level since 1985:
The White House plans on releasing 10 million barrels of oil from the Strategic Petroleum Reserve next month in response to the decision from the Organization of the Petroleum Exporting Countries to cut oil production by 2 million barrels a day.
The White House condemned the oil-producing countries for the decision, saying the are “aligning with Russia” and that President Biden will “continue to direct SPR releases as appropriate,” in addition to the millions being released in November.
Biden has been trying to keep U.S. energy prices as low as possible by tapping into the reserve, which is now at its lowest levels since 1985, according to Energy Department data.
They’re hoping that the planned bonus release in November will keep futures markets from shooting too high in October. That would accelerate the gas-price increases that are already emerging over the last couple of weeks, but the 10 million barrels are a drop in the bucket to the planned OPEC+ production cutback of two million barrels a day. Even if that output wasn’t meant for the US, it still lowers global supply by 60 million barrels a month, so adding 10 million barrels in a one-time addition won’t do much at all for prices.
Worse, it demonstrates a complete lack of strategic thinking, both on energy policy and for global security. The US needs to have strategic flexibility on oil and natural gas output in order to counter moves such as the OPEC+ cutback on production. That decision directly benefits Russia by floating the price of oil higher and by taking enough non-Russian oil off the market to force the EU away from its planned cap sanction on Russian production. If the US had maintained a flexible and scalable output of oil for exporting, we could have at least buffered that impact — and likely could have kept oil prices low enough in the first place to take that option out of OPEC+’s hands.
Once again, this is an administration that has absolutely no capacity for strategic thinking. The sudden embrace of Maduro shows that even their reactive thinking is both incompetent and utterly amoral, especially when it comes to energy. We may have two more years of this moral and intellectual void at the White House, but we can at least take away Biden’s control of Congress and start working on better energy and global-security strategies when this set of incompetent clowns finally vacate Pennsylvania Avenue in 2025.