If you’ve recently bought gasoline, as opposed to Michigan Democratic Senator Debbie Stebano, there’s a good chance you’ve seen a sticker with a picture of President Biden on the gas pump, “I did it.” Typically, these stickers are placed by customers, not gas station owners, and for that reason, I’m against them: they infringe on the owners’ property rights.
But I’m more interested in the main question here: Did Joe Biden “do it”? My answer is “something.” It was not Biden alone. The Federal Reserve had some role to play and a major role in recovery from the epidemic. But many of the steps that Biden took before Vladimir Putin’s invasion of Ukraine, and some of his subsequent steps, have certainly led to rising oil and gas prices. Biden didn’t do “that” at all. Other governments have contributed to this problem, and various U.S. government restrictions on the oil and gasoline market have also contributed.
These are David R. The first two paragraphs of Henderson, “What caused the price of gas to rise?” Defined concept30 June 2022.
One reason is the reaction of Biden and many European governments to the oil market in Vladimir Putin’s attack on Ukraine. They have joined forces to keep Russian oil out of the market. The Russian government has responded by selling oil to China and India, saying it will sell mainly to European customers. It can only be a game of musical chairs, with the qualification that the number of chairs is equal to the number of players. In that case, the overall impact on the world oil market will be small. But the joint deal seems to have survived. Why? Because the price that Russia is taking from China and India is deeply discounted from the world price. If the compromise is broken, the price will be close to equal. The EU and Biden have effectively divided the world oil market. Chinese and Indian consumers lower their demand curve at lower prices, buying more than they do, and we are bidding for other consumers to supply less. Thus, the EU and Biden have certainly contributed to higher oil prices since the Russian invasion.
Interestingly, Biden acknowledged that his and the EU’s actions had pushed up oil prices. In a speech on June 22, 2022, Biden said:
We have shut down Russian oil in the United States, and our partners in Europe have done the same, knowing that we will see higher gas prices.
Read the whole thing.