It’s a politicized country, so every problem must have a political origin. And if you’re the U.S. president when gasoline prices soar above $4 per gallon, you’ve got some explaining to do.
But President Biden has not caused the current spike in gas prices, even though critics put the blame on him. It’s true that Biden is no friend of the U.S. oil and gas industry. His plan to move from fossil fuels to renewables would marginalize oil and gas, and probably dent industry profits over time. But Biden’s energy and climate plans are nowhere near fruition, and meanwhile economic forces, not political ones, are causing tight oil supplies and pushing prices upward.
“Biden administration policies haven’t really done anything to reduce U.S. oil production,” Raoul LeBlanc, vice president of the energy practice at S&P Global, told Yahoo Finance. “They may do so in the future. But right now, that’s not the root of the reason U.S. oil and gas production is not ramping up.”
So what is pushing oil and gas prices up? Mainly it’s an effort by oil firms in the United States and elsewhere to resist overproducing, which has torpedoed profits many times in the past and, here in the U.S., caused billions of dollars in losses for oil producers and their investors. Russia’s invasion of Ukraine and the resulting sanctions have limited oil supplies from Russia, the world’s third-largest producer, accounting for a 20% price spike since Russia invaded on Feb. 24. But supply was tightening and oil prices were rising before then, as drillers worldwide adapted to a world weaning itself off fossil fuels. Since oil accounts for more than half the cost of gasoline, gas prices rise and fall in tandem with oil prices.