Biden wants oil giants to invest their huge profits in US energy production, his advisor said.
“Clearly we need to bring the prices down so consumers can afford it,” Amos Hochstein told CNBC.
Oil prices have been rising again after OPEC+ cut production, hurting US consumers at the pump.
The Biden administration wants oil companies to take the huge profits they’re raking in and invest them in US energy production, presidential advisor Amos Hochstein said.
In an interview with CNBC on Monday, Hochstein addressed the price pressures US consumers are facing at the pump triggered by Russia’s war with Ukraine. He emphasized that elevated oil prices are sparking economic instability, and have to be reduced as soon as possible.
“Clearly we need to bring the prices down so consumers can afford it,” Hochstein said.
The US fuel market is suffering from supply strains fueled by Western sanctions on Russia and maintenance issues at key regional refining hubs. That’s sent US gas prices skyward this year to as high as $5 a gallon three months ago, in line with increases in global oil prices.
At last check Monday, the US average for a gallon of gas stands at $3.76, per AAA.
Such limited supply has meant oil companies have been able to enjoy super-sized profits, with Biden slamming giants like Exxon Mobil for “making more money than God.” He’s even urged gas stations to cut their prices at the pump immediately to reflect the decline in oil prices from above $120 a barrel in March.
“Take those profits that you’re making, we’re not against profits. What we do want, the president said this last week, take those profits and invest them,” Hochstein said.
“You want to pay some back to shareholders? Some is fine, but not excessively. You want to take these profits? That’s fine too, but not excessively. We’re in a war and you can do more to increase production,” he continued.
Oil prices have been back on the rise again, increasing 5% since the start of October after OPEC+ slashed production in a bid to lift falling prices. Brent crude, the global benchmark, fell 0.61% Monday to trade at $93.14 a barrel.
In an effort to combat rising prices and ease pressure on US consumers, the Biden administration has been releasing huge amounts of oil from the Strategic Petroleum Reserve. But according to Hochstein, this is not a sustainable model.
“The United States can’t been the one that supplies the market,” he said.
Instead, oil companies need to invest their profits in US energy production to boost supply over time and help prevent prices surging in the future. “Companies need to do more to invest in America,” Hochstein said.
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