The US Presidential Coordinator on Energy and the US Senior Adviser for Energy Security, Amos Hochstein, speaks with “Sky News Arabia Economy”, to answer questions related to the events of the past year, and their consequences during 2023.
America and oil… and exceptional steps
The outbreak of the crisis in Ukraine at the end of February 2022 caused a significant increase in oil prices around the world, and in response to the big jump in the price of black gold, Hochstein said that US President Joe Biden had taken an exceptional step, represented by announcing the liberation of 180 million barrels of oil from reserves. In addition to the liberation of 160 million barrels of oil from other countries, in a similar step taken by the leaders of some countries of the world.
The move came after oil prices rose while the world was emerging from the period of the spread of the Corona virus, and these two stressful events led to a rise in prices to more than $ 120 a barrel.
“By taking this decision in addition to other measures, we were able to bring prices down from $120 a barrel in June to $80 a barrel or even less recently, and it wasn’t easy,” Hochstein said.
On the other hand, the US Presidential Coordinator for Energy indicated that the US administration announced to replenish its oil reserves in the event of a drop in oil prices, “and we are still committed to that. As the US President said, if the price of a barrel of oil drops to about $70, we will take decisions.” strategy to replenish our stocks, but it will take time,” he said.
“It should be noted that we sold barrels of oil when they were worth about $90 a barrel. If we can sell the oil at more than $90 a barrel and buy it back at $70, that transaction will be a good deal for the American people,” according to Hockstein.
Unprecedented rates of inflation
The step of using oil from reserves was a necessity for the US and global economy, according to Hochstein, who indicated that the US president was insisting that middle-income American families and American drivers not incur the costs of filling gasoline, which was then priced at $ 5 a gallon in the United States.
He explained, “Fears about rising prices and their impact are not exclusive to Americans, as high inflation rates and price hikes as a result of the war in Ukraine affected the rest of the world.”
The chief US adviser to energy security stressed that to ensure the continued growth of the global economy, it is necessary to reduce prices and reduce pressure on inflation.
The energy sector is the key point to do this, as it is not only about the ability to fill the tanks of cars; However, gasoline and diesel prices have a significant impact on food prices and economic activities, which directly affects the purchasing power of households around the world, and oil prices are a large part of food prices as well, “and it is necessary to ensure that prices are reduced even if producers achieve slightly less profits.” , as he put it.
Gas.. and the old continent
In his exclusive interview with “Sky News Arabia Economy”, Hochstein confirmed that the United States is meeting the needs of the market, noting that gas prices in the United States are often much lower than prices in European markets.
He explained that some companies were buying liquefied natural gas from the American markets and selling it to European markets at more expensive prices, indicating that this matter is happening outside the American borders, stressing that the US government does not control the prices of liquefied natural gas in the United States, and does not control the prices when this gas leaves. American lands.
The US Presidential Coordinator for Energy said, “I can assure you that all LNG shipments that left the United States were sold at much lower prices, and anyone in Europe can import American LNG directly from the United States and according to specific contractual contracts, and its prices will be much lower.” From the prices we saw during the winter and last fall.”
He stressed that there is no reason to say that the United States is doing anything other than supplying Europe with liquefied natural gas at its price in the American market, or even at prices lower than any other source.
Hochstein believes that European dependence on American gas completely is not possible, stressing that there are not enough quantities of gas or liquefied natural gas in the United States to fully supply European markets.
He said, “What we want to see is a diversification of LNG markets and a diversification of natural gas sources that enables consumers to obtain purchase options from countries such as Qatar, the United States, Norway and Australia.”
Hochstein confirmed to Sky News Arabia that the United States, under the administration of former President Barack Obama, warned Europe against excessive dependence on Russian gas and oil, because this leads to a lack of competition, “in other words, putting all eggs in one basket.”
He explained that US President Joe Biden and the President of the European Commission, Ursula von der Leyen, signed an agreement for cooperation on natural gas and liquefied natural gas, in order to reduce demand and on renewable energy sources, with the aim of helping Europe withstand.
Ukraine war.. to where?
There is no way to win during this war, according to Hochstein, who confirmed that its outbreak was a mistake, and that it could end at any time.
The chief US adviser for energy security confirmed that Russian President Vladimir Putin is able to end the war, denying that the United States has won the economic war, as this is a war that America does not want to participate in, and does not want to impose sanctions and interfere in the markets, “unless We didn’t have any other choice.”
The US administration, according to Hochstein, is trying as much as possible to ensure that when Putin launches the war in Ukraine, it will be able to limit his access to the huge profits at the same time, and it also wants to make sure that the sanctions imposed on Putin and the Russian economy will harm them only and not Europe, the United States or its allies.
To do this, the United States and its allies imposed a price ceiling to ensure that gas supplies continued on the one hand; On the other hand, it limited Russia’s revenues.
It is too early to say that America and its allies have succeeded in achieving this, “because we started imposing a price ceiling only a month ago, and therefore, it is too early to talk about the results of this decision. But, in my opinion, things are good and successful so far.”
“We know that Russian oil is sold at a huge discount and that, over the past weeks, it has sold for less than $40 a barrel. This is the goal we are trying to achieve,” according to Hochstein, who said that America has a very simple message to the Russian president: “Put an end to this war, let’s stop this.” Actions, we’re not trying to win an economic war, what we want to end is the horrible actual war going on in Ukraine.”
America and China.. and seeing the world
During the recent period, President Biden made many phone and video calls with his Chinese counterpart, Xi Jinping, according to Hockstein, and the two presidents also met when the United States participated in the G-20 summit in Bali, Indonesia, about two months ago.
The chief US adviser for energy security confirmed that communication continues between the two parties, despite the surprisingly different visions between the two parties.
He stressed that the United States and China do not necessarily share the same vision of the world, especially in light of the existence of a kind of global competition in some sectors between the two largest economies in the world.
Hochstein confirmed that President Biden will continue to lead the United States by adopting a foreign policy, not just an internal one, that reflects American values, and believes that when it is possible to choose global and free market values that respect human rights, democracy, labor laws, and environmental laws, and are integrated into our global values and business operations, most people will want Around the world we do business in a way that reflects these values.
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