OPEC+ cuts leave Biden with few tools left to ease consumers’ pain

When President Joe Biden in March ordered the release of 180 million barrels of oil from the U.S. Strategic Petroleum Reserve, it was a historic moment — marking the largest and fastest release of oil from the national emergency stockpile since its creation in 1973.

“The bottom line is, if we want lower gas prices, we need to have more oil supply now,” Biden said during his speech in March announcing the SPR sales.

It was intended to help ease the global demand caused by Russia’s war in Ukraine and thus drive down gas prices for U.S. consumers, and it did: The national gas average fell last month to $3.67 per gallon, down from the all-time high of more than $5 a gallon in June.

Biden’s approval ratings rose as gas prices fell, and Democrats, bracing for a brutal red wave in the November midterm elections, appeared to breathe a sigh of relief.

Until early October, OPEC+ announced Oct. 5 that it would slash its oil production by 2 million barrels per day, the largest reduction since the start of the COVID-19 pandemic. It’s one that is all but ensured to drive up energy costs again; this time, at an even more politically perilous time for Biden and Democrats in Congress, who have just weeks before the midterm elections.

The White House, for its part, issued a blistering response to the OPEC+ announcement Wednesday, describing the production cuts as “a shortsighted decision” at a time when maintaining global energy supply “is of paramount importance.”

White House press secretary Karine Jean-Pierre told reporters it is “clear” OPEC+ is “aligning with Russia,” and officials also said Biden might release additional oil from the SPR if necessary.

Still, the simple fact remains that Biden has far fewer resources at his disposal to ease the supply crunch and bring down prices than he did seven months ago.

When he first announced the drawdowns in March, the United States had around 575 million barrels of oil stored in its underground reserves. Now, those stockpile supplies have dwindled to their lowest point in four decades — down to about 416 million barrels, according to data from the Energy Information Administration. (For context, that’s enough to supply the global oil market for about one week.)

Experts warn that continuing to put additional SPR on the market could pose a major national security risk.

“The long-term future of the SPR is very much in doubt, and everything that the Biden administration has done with respect to it has only accelerated its demise,” said Tristan Abbey, president of Comarus Analytics and a former Republican senior policy adviser at the Senate Committee on Energy and Natural Resources.

“If you deplete the reserves, then you’d have fewer barrels to be able to put on the market when you really need it, and then you have to go back, hat in hand, to Saudi Arabia, and [beg for] more oil production for that,” he said.

In addition, the Biden administration has not yet begun to replenish the SPR supply — something it is obligated to do without emergency congressional intervention. Another question is when it plans to buy back the oil sold, as oil prices are likely to remain high for the foreseeable future.

Some analysts said the writing was already on the wall. The OPEC+ announcement was not exactly a surprise and came after a failed lobbying attempt from Biden, who traveled to the kingdom for the first time as president in July.

“I would say that as disruptive as the war in Ukraine has been to global energy markets, there are still many scenarios out there — particularly those involving the Middle East — where severe energy disruption would inflict even greater damage to the U.S. economy,” Abbey said.

“And that over the near, medium, and long-term, treating the SPR as an ATM and using it for blatantly political or electoral-related reasons would impair our nation’s energy security.”

Now, he said, the question for the Biden administration is: “Do we continue with our SPR drawdown and continue to push more oil out there? Do we increase the amount of barrels that we’re putting out there, and unleash even more, to try to counteract this?”