president biden has limited options to counter opecplus ignoring white house pleas to produce more oil and soften the price rally some strategies like releasing oil from strategic reserves could even backfire and further lift prices the administration says all options are on the table to keep domestic gasoline prices rising further as benchmark crude pushes back over 80 a barrel but the us gripes with opec only highlight the white house’s inability to impact oil prices in the short term the biden white house has pressured saudiled opec to open the taps but the group on thursday stuck to its plan to add 400000 barrels a day in december as it sees uncertain winter demand and inventories rising in the first half of 2022 in response white house deputy spokesperson karine jeanpierre said that “this is not the end” adding that biden officials will continue to “have those conversations” with producer countries opecplus is the focus because it has some 5 million barrels a day of immediately available spare capacity however it has decided to keep the market tight to stay in control and prevent eroding its strength during the pandemic recovery the us is considering a release of crude from its strategic petroleum reserve spr which holds 621 million barrels in caverns in the us gulf coast but that runs against established rules that those stocks are to be used only in cases of supply disruptions us producers who are reaping the benefits from higher oil prices balk at market intervention that would lower oil prices spr sales without any supply disruption would only emphasize supply tightness and the market would see such a move as desperation and a signal to bid up prices further producers have more muscle and a much more significant market impact than the release of oil from limited inventories even president biden acknowledged in october that releasing oil alone would not significantly impact the price consumers pay at the pump the white houses primary concern nevertheless a release of spr oil would likely only have a temporary bearish effect on prompt prices and is not a lasting solution for an imbalance between supply and demand for the market to turn bearish a coordinated government intervention policy is needed which looks unlikely because there is no legitimate supply disruption to justify it 350 a gallon gasoline prices is not an emergency it’s a political problem for biden the president could also take a more positive approach to the domestic oil industry instead of attacking it with policies like terminating the keystone xl pipeline halting federal lease sales and generally catering to climate activists rather than honing on energy security his decision at cop26 for the us to join other nations in ending public financing for international oil and gas projects by the end of 2022 is the latest example of his assault on oil and gas supply this sends a bearish signal to investors in america’s oil industry and makes them less inclined to invest in new supply projects the department of energy doe can also do limited “exchanges” in which it releases to refiners oil that is later replaced the agency did that as recently as september in the wake of hurricane disruptions the threshold for action on an exchange is lower too making it a somewhat easier tool to reach for the doe also has mandatory releases from strategic stocks to contemplate congress has approved sales that would lower the stocks by 300 million barrels over the next decade since midseptember spr sales have run at an average of 11 million barrels per week for a total of 9 million barrels since the start of 2021 the us has sold 26 million barrels from the caverns according to energy information administration eia data doe has authority on timing for these releases meaning it could conduct the sales when it believes the market is more likely to be tight but those sales are already priced into oil so it wouldn’t drive the price lower biden’s focus is on prices at the pump which have been above the politically sensitive 3 a gallon level since may independent us refiners are again pushing for a change they have long sought to the renewable fuel standard rfs program which requires specific volumes of biofuels blended into the nation’s gasoline the price for compliance credits known as rins for that program has skyrocketed over the past year adjusting the required volumes or offering some sort of temporary relief from complying with the program could directly impact the price of gasoline however doing so could be politically complicated for the biden administration because of the perception that it would be undercutting a market for renewable biofuels which is a key part of the president’s platform to combat climate change the political complexity of the program lawmakers from farming states and oil states alike take a keen interest in it means that decisionmaking has been pushed back as the white house tries to deal with its main priorities the recently passed infrastructure bill and the reconciliation spending legislation another option the us would have is limiting imports or exports of crude and refined products six years after the obama administration lifted the crude exports energy secretary jennifer granholm has acknowledged the us can limit exports but there is intense skepticism about whether such an action would lower the crude prices that are the primary driver of gasoline prices since doing so would create dislocations in the global market limiting oil flows would impact domestic producers or refiners and further dent the reputation of an administration that needs to balance calls for a lowcarbon future with complaints about high shortterm gasoline prices such a move would be a political minefield with intense backlash in energyproducing states where producers and coastal refineries want export operations to maximize profitability after all america should be all about free markets as recently as august the united states was a net exporter of petroleum a signal that domestic demand can be more than met by domestic production of oil natural gas liquids and biofuels so exports are not the problem like the us india and japan have also been calling on opecplus to push more oil into the market to keep the prices of refined products in check but saudi arabia opecs de facto leader says consumers are calling on the wrong party the world is not short of crude saudi oil minister prince abdulaziz bin salman says its short of oil products prince abdulaziz called rising prices the result of scaremongering over a cold winter and the natural gas prices that boost demand for refined products this winter the recent push in oil prices over 80 was mainly driven by traders betting on substantial fuelswitching by some power generators and industrial players the concern is that players with fuelswitching capability will use cheaper oil products instead of more expensive gas which will drive up oil demand by as much as 1 million barrels a day this winter so the arrow continues to point higher for oil how high bank of america recently predicted that brent benchmark prices would surge to 120 a barrel by june 2022 a 45 increase from current levels