ALL GAS, NO BRAKES — OPEC cutting output. War in Ukraine. Global inflation. The Biden administration publicly clashing with oil companies. Refineries offline in California. All of it has added up to a recent rise in gas prices at the worst possible time for President Joe Biden and his party — less than three weeks before the midterms. The Biden administration has bristled at the idea that they’re making energy decisions based on the political calendar. But they’re well aware that the price of gas correlates pretty directly to Democrats’ approval ratings. “Commodities traders see [rising prices] as a temporary issue,” said Ed Hirs, an economist and Energy Fellow at the University of Houston. “The unfortunate thing for the president is it’s happened right before midterms. That’s just bad luck.” Temporary or not, Biden is trying to pull as many levers as he can to address the situation. The problem is, oil markets are difficult to predict — or influence — because they are driven by a market that moves based on global events and forces outside any one country’s control. “When it comes to global oil markets, who knows?” says Andrew Campbell, the executive director of the Energy Institute at UC Berkeley’s Haas School of Business. Still, the president is looking for ways to improve his odds. On Wednesday, Biden released the last of the 180 million barrels from the Strategic Petroleum Reserve that he authorized in March. He’s continued to hammer oil companies for pocketing profits that they could be using to drive their prices down. And he’s asked OPEC leaders — specifically Saudi Arabia — to delay their decision on reducing oil outputs. Tapping into America’s oil reserves may well have helped to keep the problem under control. But whether Biden is explicitly playing politics with the country’s oil reserves — as Republican Sen. John Barrasso accused him of doing — or not, releasing more petroleum likely won’t lead to a big short-term difference at the pump in the next few weeks. “There’s an obvious disconnect between the upstream price [of oil] and the downstream price, the refined products [of gasoline].” Hirs says. So, even though Biden can release more petroleum, or crude, unrefined oil, that doesn’t always directly correlate to a change in price. The amount of petroleum available at any given time is far from the only factor in determining gas prices — other global events can easily disrupt the market. We’ve had to divert oil to our European allies, refineries aren’t producing at the same rate they have in the past, and Russian oil production is down, likely by about a million barrels of oil a day, according to Hirs. “We’re at war, we’re just not shooting right now,” he says. All of this adds up to an unstable oil market and gas prices that are prone to quick and pronounced spikes. “Prices are high due to global events,” according to Campbell. “The thought that any country could impact this global situation seems overly optimistic.” So, should Biden throw up his hands or cross his fingers and hope for the best? Not quite. “In the short term, the main thing that [the administration] should be doing is trying to explain to the public what’s going on,” says Campbell. That explanation might be more effective if it comes from a public-facing energy czar, something the Biden administration currently lacks; Secretary of Energy Jennifer Granholm has not been a regular and recognizable public face on the issue. “There’s no one visible in the administration that has ever drilled a well,” says Hirs. For now, Biden is stuck in a political thicket. He doesn’t want to overreact to this current spike and slow down his priority of transitioning to the use of more renewable energy. But he likely needs gasoline prices to drop rapidly if he wants his party to retain control of Congress — and thus enable him to pursue a robust agenda for the next two years. Welcome to POLITICO Nightly. Reach out with news, tips and ideas at nightly@politico.com . Or contact tonight’s author at cmchugh@politico.com or on Twitter at @calder_mchugh .
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