Publications: Notes at the Margin

The Biden Transformation of the Global Oil Market (June 19, 2023)

 

Joe Biden has transformed the global oil market. No one has noticed. Dated Brent, the key benchmark for global oil prices, trades today at more than $25 per barrel lower than it would have absent his actions. Biden’s administration changed crude oil pricing singlehandedly through its aggressive lead in using strategic petroleum reserves to moderate oil prices after Russia invaded Ukraine. The long-term economic effects of releases from the US and other nations have changed industry behavior even though the programs have ended and countries are starting to replace the oil. The transformation has now cost world oil producers almost $1 trillion. Simultaneously, refining companies have reaped huge benefits from the combination of lower oil prices and high margins.

 

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