Just in Time for Biden's State of the Union: Oil Surpasses $106 Per Barrel for First Time in Over 7 Years


There is no need for President Joe Biden to give the State of the Union address scheduled for Tuesday.

OK, there is that pesky constitutional requirement that dictates it, but the Constitution isn’t all that relevant in Washington these days, so why bother?

There is no need for Biden to give a report on the state of the nation since the nation already knows the state it is in — all people have to do is go to a gas pump.

The price of oil climbed past $106 per barrel on Tuesday for the first time since July 2014, according to Reuters — a 7 percent increase.

The average national retail gas price was $3.62 per gallon, AAA’s website said, topping out at $4.84 in California. A year ago, it was $2.72 per gallon.

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That, my fellow Americans, is the state of the union.

Of course, this month’s Russian invasion of Ukraine hasn’t helped.

“Oil’s climbing the Ukraine war wall of worry,” John Kilduff of Again Capital said, according to Reuters.

The outlet reported that members of the International Energy Agency agreed Tuesday to the release of 60 million barrels of oil reserves.

But that might not be enough to satisfy oil traders, Kilduff said.

And it’s certainly not enough to satisfy worldwide demand since 60 million barrels would only last one day.

While sanctions against Russia by the U.S. and others have, for the most part, avoided Russian energy production, traders are skittish about it and staying away. That’s limiting the overall world supply.

Also, oil and gas producers such as BP and Shell say they will abandon Russian operations, and TotalEnergies is halting further capital investment there, Reuters said.

One of the world’s largest container and ship operators, Maersk, is stopping transport to and from Russia, and Britain is keeping out of its ports ships with any Russian connection.

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Despite requests by the U.S. and others, Organization of Petroleum Exporting Countries countries, along with Russia, have made no indication they would boost production.

Supply and demand — they control the price, and the price doesn’t look good.

American consumers not only have been shocked at the gas pump but also have experienced skyrocketing inflation at the grocery store and elsewhere during Biden’s presidency — with no end in sight.

Are you better off today than you were a year ago?

After all, how do all their products, from food to shoes to toothpaste, get to their homes but by the diesel oil that propels the trucks, trains and ships that carry them? Fuel costs are the foundation for all prices.

Of course, the administration has answers, as when press secretary Jan Psaki, asked several weeks ago about increased U.S. oil drilling, said the solution is those goofy inefficient windmills and unreliable solar collectors.

I know, she didn’t literally say that, but she might as well have.

“It is a huge advantage to us to be a leader in the clean energy transition,” Psaki said during her Feb. 7 news briefing at the White House.

“And over the course of years and decades, we’ve become a clean energy superpower,” she said, adding that the oil companies are the problem.

“I would note again — and you can ask the oil companies this –there is land they’re not all drilling on,” Psaki said. “Every lease is not used. I’d encourage them — you to ask them that question.”

Yes. It’s the oil companies’ fault, she replied, thinking we’re really stupid enough to believe that since the Biden administration is restricting sites for drilling.

The real solution to all this?

A step in the right direction is what we had in the Trump years: the long-sought position of energy independence, immediately eroded by Biden’s suspension of the Keystone XL Pipeline project.

High gas prices, overall inflation, stalled recoveries from the fiascos of the handling of COVID by public policy officials, the Ukrainian war with its wild talk of nuclear weapons — all of it ties into the state of the union.

Sometimes when a speaker prepares a speech, he or she will use a mirror in rehearsal. Perhaps it would be good practice for Joe Biden.

Because in the mirror he can see a major cause of the nation’s energy problems.

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Mike Landry, PhD, is a retired business professor. He has been a journalist, broadcaster and church pastor. He writes from Northwest Arkansas on current events and business history.
Mike Landry, PhD, is a retired business professor. He has been a journalist, broadcaster and church pastor. He writes from Northwest Arkansas on current events and business history.