I’ve noted here before that the Biden administration appears to being valuing oil prices more than freedom in Venezuela. Now there is more evidence.
With the Saudi and Russian production cuts staying in place, and our election approaching next year, how will the administration keep oil prices down? Simple: increase the amount of Venezuelan and Iranian oil reaching the market.
Well, not so simple: there are sanctions against both countries’ oil industries. In the case of Iran, the “simple” part is loosening up on sanctions enforcement. That has been happening, and Iranian exports are steadily rising. Here is Reuters’ account:
Iran's oil output and exports jumped in August despite U.S. sanctions, according to consultants and companies that track tanker shipments, as Tehran sells to buyers including China.
Analysts said the higher exports appear to be the result of Iran's success in evading U.S. sanctions and Washington's discretion in enforcing them as the two countries seek better relations.
The United States has sought to limit Iran's oil exports since Donald Trump exited a 2015 nuclear accord in 2018 and re-imposed sanctions aimed at curbing revenues to Iran's government. But the exports have risen during President Joe Biden's term, with China a top buyer, according to the industry trackers.
SVB International, a consultant, estimates Iran's oil production increased in August to 3.15 million barrels per day (bpd), the highest since 2018….
In Venezuela, the Biden administration seems heading for the lifting of sanctions. This is from the Houston Chronicle:
According to Kevin Book, managing partner at the consulting firm Clearview Energy Partners, “…the White House seems to be establishing a relatively low bar for a deal. There’s probably room for the Venezuelan regime to give up a little and maybe get a lot.”
The easing of sanctions against Venezuela — and potentially Iran as well — would increase the supply of crude on the global market, driving down prices at a time OPEC has been working to raise them.
“The regime has not been behaving in a way consistent with democratic reforms,” Book said. “But momentum seems to be going towards sanctions relief. The White House may have concluded that getting prices down plays better than being tough on Venezuela.”
I think that last line has it wrong; the issue isn’t “Being tough on Venezuela.” It is whether the Biden administration cares more about election-year gasoline prices or the struggle for freedom in Venezuela.
The administration has a line to feed the press, and voters: sanctions on Venezuela will be lifted only in exchange for democratic progress. But there is zero democratic progress and there will not be anything remotely resembling a free election in 2024, yet the lifting of sanctions seems sure to move forward.
The policy appears to be encouraging Iranian and Venezuelan oil exports to grow despite rising human rights abuses in both countries and their status as enemies of the United States, while working hard to be sure U.S. oil and gas exports do not grow. Here’s The New York Times on September 7th:
President Biden’s decision on Wednesday to block drilling on millions of acres of Alaskan tundra was the latest in a series of aggressive actions recently taken by the administration to curtail fossil fuel extraction on public land and in federal waters.
Over the past several months, the administration has moved to bar drilling on 1.8 million acres of sagebrush steppe in Wyoming and on more than a million acres of public land in Colorado. It insulated more than 336,400 acres of public land around Chaco Culture National Historical Park from new oil and gas leasing and mining claims for the next two decades. And last month, it said it would remove about six million acres of potentially oil-rich areas from an upcoming federal lease sale in the Gulf of Mexico that is required by law.
The Interior Department has also raised the royalties that fossil fuel companies must pay to pull oil, gas and coal from public lands for the first time since 1920, while increasing more than tenfold the cost of the bonds that companies must pay before they start drilling.
How this contributes to U.S. national security is a mystery, but it is clearly unrelated to any effort to promote and defend human rights. The Secretary of State used to say “The United States is placing democracy and human rights at the center of our foreign policy, because they are essential for peace and stability.” That was two and a half long years ago. Oil prices are a bit closer to “the center of our foreign policy” these days.