Joe Biden announced Tuesday, November 23 that the United States will use 50 million barrels of oil from their strategic reserves in an attempt to lower crude prices, as part of a coalition of six countries with China, Japan, India, South Korea and the United Kingdom United. “That has no chance of working “, judged on franceinfo Thierry Bros, energy specialist and professor at Sciences Po Paris. According to him, “it is more a communication operation than anything else “.
franceinfo: Have we ever seen this kind of operation?
Thierry Bros : No, it’s quite unique. Normally, this is done at a higher level, when there is a breakdown in the security of supply, and in a coordinated manner across all OECD countries, and therefore rich countries. President Joe Biden wants to reduce the temperature in the oil markets. He wants oil not to go beyond $ 85 per barrel and there are several remedies for that. He tried this one after trying two others before. He tried to ask the Organization of Petroleum Exporting Countries (OPEC) to produce more and received a negative response. He tried to see if there had been any market manipulation in the United States, which seems rather unlikely. Finally, you have the solution in place today. Unfortunately, as we can see in the prices, this does not solve the problem since the price of a barrel of oil goes up. This has no chance of working. It’s more communication than something that will cure this temperature. There is only one remedy, and that is to facilitate the production of oil and gas again in the United States, which is a major producing country. But the first gesture of the Biden administration when it arrived was to stop the pipeline project that was to get oil from Canada to the United States.
Why should the great oil-producing country of the United States have an interest in the price of a barrel not being too high?
For the voters, since at the end of the day, it is the voters who vote! In the United States, the increase in prices that we have seen in the past year is reflected 100% at the pump. This alliance is also a message that is sent to the Gulf countries. China has not said how many barrels it will take out of its reserves and one can imagine that Chinese barrels will stay in China. What the Americans want to put back on the market, between December and April of next year, is the equivalent of half a day of global consumption. So it’s more of communication than something really coordinated.
What could act on the Gulf countries or on world prices so that there is a drop?
To do this, we must relaunch investment and understand that, in this energy transition, we are going to need more energy. The dogma which would like us to lower our energy consumption is false. It’s a bit like lowering taxes, it only happens very rarely. We must therefore take into account the fact that we will need more energy and give this signal so that investments in the Gulf countries, in Russia and in the United States can be made so that we can recover this oil, this gas and this renewable energy at prices acceptable to our fellow citizens.
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