As U.S Gasoline Prices Soar 60% And Inflation Hits 31-Year High, Biden Targets Big Oil Alleging "Potentially Illegal Conduct"

Claiming that there was strong evidence of "anti-consumer behavior" by big oil including including ExxonMobil and Chevro, U.S. President Joe Biden on Wednesday (Nov 17) demanded a probe by Federal Trade Commission (FTC) in to their "possible illegal conduct".

Biden alleged that the actions of oil supergiants were causing the spike in gas prices and contributing to surging inflation.

In a letter to FTC chairwoman Lina Khan, the president claimed that “gasoline prices at the pump remain high, even though oil and gas companies’ costs are declining.”

Biden said that the two largest U.S. oil and gas companies were on track to nearly double their net income compared to 2019. The president highlighted the plans announced by oil supermajors to engage in billions of dollars of stock buybacks and dividends this year or next

"I do not accept hard-working Americans paying more for gas because of anti-competitive or otherwise potentially illegal conduct," the president said in the letter to Khan.

“The Federal Trade Commission has authority to consider whether illegal conduct is costing families at the pump. I believe you should do so immediately.”

Oil prices crashed to record lows last year after Covid-19 lockdowns fuelled fears of permanent demand destruction but has more than doubled since Nov 2002.

The critics of Biden administration have blamed his policies for the soaring fuel prices and declining domestic production. In one of his first moves after assuming office, Biden cancelled the permit for the Keystone XL pipeline, which would have potentially carried more than 830,000 barrels of oil a day from Canada through the U.S.

The Biden administration has also blamed the jump in oil prices due to cuts to production output by OPEC, calling on the oil cartel to ramp up production. But OPEC has rebuffed pressures from the United States government to ramp up the global oil supply.

Another option that Biden is reportedly considering is to release oil from the Strategic Petroleum Reserve (SPR) — the stockpile of crude that the U.S. government stores underground, so the country can cope with any unexpected disruption in crude supply.

The U.S. could also consider a ban crude oil exports, which now make up a huge part of the U.S. oil industry. While this may result in price reduction for U.S consumers, it will disincentivise an already-weakened domestic energy sector and deprive them of access global markets,