When oil prices surged during Donald Trump’s term in the White House, OPEC and its allies had to brace for a Twitter storm demanding action to bring prices down.
That has all changed under U.S. President Joe Biden. His team barely uttered a word this month when crude soared to more than $70 a barrel, an almost 40% rise from the start of 2021.
“Biden’s people are busy on other fronts, like fighting the pandemic,” said one OPEC source.
It is not just that Twitter is no longer the preferred means to communicate U.S. demands. OPEC sources say no-one from the Biden administration has even reached out informally to OPEC to complain about the latest oil price rise, which was fueled by a decision in March by OPEC, Russia and others to stick broadly to existing production restrictions rather than to open the taps.
When the Organization of the Petroleum Exporting Countries and its allies meet again on April 1, traders and market sources say the group known as OPEC+ can pursue policies to prop up prices in the knowledge the White House won’t be breathing down its neck.
“Right now is the ideal point in time,” said an oil trade source and veteran OPEC watcher. “One doesn’t need to worry about backlash from Washington, as Trump is gone.”
After a demand slump sent oil prices crashing in 2020, crude has rebounded. Brent hit $71.38, on March 8, after the OPEC+ decision on March 4 to keep most of their production curbs in place.
Yet, White House Press Secretary Jen Psaki made no direct comment about the OPEC decision when asked about it on March 4 and instead said the United States was focused on helping Americans via the U.S. economic stimulus package.
Oil prices have now eased from their highs but are still up almost 20% this year, trading at $62 on Wednesday.
A spokesperson for the National Security Council (NSC) at the White House said there had been no U.S.-OPEC contact on oil policy or prices since Biden took office on Jan. 20, although that did not mean the oil market was off the radar.
“The Biden Administration continues to monitor oil market developments carefully as economies reopen and oil demand recovers to ensure economic stability as a short-term imperative,” the spokesperson said.
‘FAR LESS VOCAL’
For now, OPEC+ delegates expect there will be no output increase or only a modest one agreed on April 1.
Asked if Washington wanted OPEC+ to agree to pump more oil, the NSC spokesperson said the government was “committed to supporting policies that ensure the American people have reliable access to sustainable and affordable energy resources.”
The contrast with Trump’s approach could not be more stark. The former U.S. president often took to Twitter to address the group directly and to demand publicly that it change policy.
“REDUCE PRICING NOW!” Trump tweeted in July 2018, addressing a group he called the “OPEC Monopoly” in a month when crude hit $80.
In April 2020, when prices crashed, hammering U.S. oil producers as well as others, Trump engaged in talks that included Saudi Arabia and Russia, leading to a deal in which OPEC+ agreed a record supply cut. Most curbs remain in place.
“The Biden administration has been far less vocal and I don’t see them interacting much with OPEC+ in the near term either,” said Samuel Ciszuk, who founded consultancy ELS Analysis and previously worked for the Swedish Energy Agency.
Since taking office, Biden has kept his distance from Saudi Arabia and Russia, the two leading producers in OPEC+.
His administration imposed sanctions on some Saudis over the 2018 murder of Jamal Khashoggi and the U.S. president has said he thought his Russian counterpart Vladimir Putin was a killer, sending diplomatic ties to a new post-Cold War low.
“Firstly, on a political level both Russia and Saudi Arabia have been pointedly shunned by Biden himself in his first months, in order for him to send a message,” Ciszuk said.
“And from a market and economics perspective, I think the Biden administration has also had to focus elsewhere.”
The NSC spokesperson said Biden’s team was not seeking to play a less active role than Trump’s administration in trying to influence OPEC policy but the emphasis was on clean energy.
“The United States will utilize its strong relationships with other major oil producing economies to meaningfully advance the clean-energy transition and jointly pursue a path towards our climate goals,” the spokesperson said.
That goal was to achieve net-zero carbon emissions by 2050, the spokesperson said.
Be smart with your money. Get the latest investing insights delivered right to your inbox three times a week, with the Globe Investor newsletter. Sign up today.