Oil price pressure or let the United States relax? Biden: Consider allowing Russian oil to be sold at low prices

On Wednesday (June 1), U.S. President Joe Biden said the U.S. currently has no way to significantly lower gasoline prices and is considering other proposals, such as trying to set a lower selling price for Russian crude so it can enter the market.

Biden: Can't push down oil prices in the short term, consider setting a price ceiling for Russian crude

According to US media reports, Biden told reporters at the White House on Wednesday (June 1): "The idea that we can reduce the cost of gasoline at the flip of a switch is unlikely to be realized in the near future, nor is it possible for food prices."

High gasoline and food prices have become an explosive political issue for a Biden administration. The U.S. is about to hold mid-term elections in November this year, and soaring gasoline and food prices have caused Biden’s Democratic Party’s approval ratings to decline and may lose seats in the Senate and House of Representatives in the mid-term elections.

U.S. gasoline prices are currently at a record $4.67 a gallon, according to the American Automobile Association (AAA). Although the United States has used its strategic oil reserves to try to suppress oil prices, it has had little effect. Biden still stressed on Wednesday (June 1) that the administration's efforts will help prevent oil prices from rising further.

As Europe began to cut back on Russian oil purchases and announced it would ban the vast majority of Russian crude by the end of the year, Biden hinted that the U.S. could allow price caps on some Russian crude sales.

"We're thinking a lot about what we can do, including putting a price cap on (Russian crude) oil prices and allowing them to be sold abroad - Russia badly needs to sell crude oil, it sells for it," Biden said. It will also be well below the current market price.”

US media said he gave no further details.

According to a report by the Russian Satellite News Agency, US President Biden said that the West is exploring the feasibility of buying Russian oil at below market prices, rather than giving up imports.

Biden said food prices were also affected. Ukraine is a major grain-producing country. After the outbreak of the Russian-Ukrainian war, a large amount of grain was trapped in the country and could not be shipped out. Biden said U.S. officials were continuing to push for food shipments from Ukraine.

"You know, we're trying to deal with a war. We're trying to figure out a way to open up the ports and bring in tens of thousands of tons of grain. The same goes for gasoline," Biden said.

There are also differences of opinion within the Biden administration

According to U.S. media reports, White House officials familiar with the matter revealed that at a time when the current high prices have seriously threatened Biden’s approval rate, there have been differences within the Biden team on how to promote sanctions against Russia.

A faction of many officials at the State Department and the White House is said to have advocated for tougher sanctions against Russia.

But another group of officials worry that supply chain problems, inflation, oil price volatility and a potential food crisis have put further pressure on the global economy and weighed on Democrats' approval ratings in the upcoming midterm elections.

Most of the officials who hold the latter view are from the Treasury Department, led by Yellen.

The claims are said to take a different, untested approach: capping oil prices, allowing countries to buy Russian energy, while limiting Russian revenue.

Article source: Financial Associated Press