As Biden touts "Bidenomics" for his re-election campaign, the sustained rise in crude oil has caused growing concerns within the White House.
After Saudi Arabia and Russia reduced supply this summer, global crude oil prices shot up by 20%, propelling U.S. gas prices to a nine-month high. This resurgence has fueled predictions of oil reaching $100 per barrel this year and could jeopardize Biden's re-election bid.
According to a Monday report from Bloomberg, Bob McNally, head of consulting firm Rapidan Energy Group and a former advisor to President George W. Bush, said the White House is deeply alarmed. He mentioned that almost every president faces threats when oil prices surge, as it impacts consumer confidence and presidential approval ratings.
The Federal Reserve has managed to curb inflation after several consecutive rate hikes, heightening hopes for a soft landing of the economy. In recent weeks, Biden has been emphasizing "Bidenomics," highlighting a decrease in inflation alongside low unemployment rates to bolster his campaign. However, Republican opponents have seized on the recent fuel price hikes, blaming Biden's "American Energy War" for the surge in crude oil prices.
Last week, taking a risk of infuriating the White House, Saudi Arabia announced an extension of its production cut policy, heightening market concerns over crude oil supply. The International Energy Agency warned of a significant tightening in the crude oil market in the coming months.
Goldman Sachs analysts stated last week that, with a surge in summer air and road travel, global oil demand this July is estimated to reach an all-time high of 102.8 million barrels per day.
Consultancy Enverus believes that the combination of soaring global demand and sluggish supply growth might push Brent crude oil prices to $100 per barrel by year's end.
With the rise in oil prices, the White House might be running out of solutions. Analysts have pointed out that the White House, in an effort to cool the oil market last year, made significant cuts to inventory, driving strategic oil reserves to their lowest levels since 1984. This has weakened the White House's capacity to control a new surge in oil prices.
