“The Biden administration is now considering buying oil from Iran, the world’s largest state sponsor of terror. There is absolutely no reason to import terrorist’s oil when we can drill better, cheaper, and cleaner right here at home,” Rep. Jim Banks (R-IN), chairman of the Republican Study Committee, said on Tuesday.
Banks said that US President Joe Biden “crushed the American energy industry on day one of his presidency,” forcing the US to become “dependent on our foreign adversaries for oil.” He was likely referring to Biden’s executive order on his first day in office that banned oil drilling on federal lands and protected areas, as had been controversially allowed by the prior Trump administration. Banks said this caused a spike in oil prices, which he credited for enabling Russian President Vladimir Putin to launch a special military operation in Ukraine.
On Tuesday, Biden also announced he was banning the importing of Russian petroleum products as part of the latest round of sanctions in retaliation for the Ukraine operation, which aims to destroy the neo-Nazi forces in Ukraine the US has enabled for years.
However, those sanctions could impede Biden’s effort to revive the JCPOA, which after nearly a year of talks in Vienna, Austria, seems to be on the cusp of success. The 2015 deal, signed with seven powers, including the US and Russia, placed strict limitations on the quality and quantity of uranium Iran could refine in exchange for the removal of international sanctions against Iran’s economy. However, the US pulled out in 2018 and reimposed the sanctions, claiming without evidence that Iran was secretly pursuing a nuclear bomb.
Speaking to Iranian Foreign Minister Hossein Amirabdollahian on Monday, Russian Foreign Minister Sergey Lavrov said it was essential that the new JCPOA “provide for all participants to have equal rights in relation to the unhindered development of cooperation in all areas without any discrimination.” The statement has been widely interpreted as meaning that Iran should be exempt from the US sanctions against Moscow, a key economic partner of Iran and a major player in Iran’s civil nuclear program.
The sanctions are threatening to hurt the US economy, too: the price of crude oil in international markets has spiked sharply over the past two weeks, and domestic gasoline prices have hit their highest point in 15 years. With the US already facing its worst inflation in 40 years thanks to higher shipping costs created by the COVID-19 pandemic, investors are expecting the situation to become even worse.
Jim Paulsen, chief investment strategist for the Leuthold Group, told CNBC on Monday that “‘stagflation’ is rapidly becoming the central focus in portfolio strategies,” referring to the 1970s phenomenon caused by Middle Eastern oil exporters imposing an embargo on Western nations who supported Israel in the 1973 war.
“Preparing for slower growth and more persistent inflation is driving investor fears and actions," the analyst added.
At home, Biden is facing increasing criticism of high gas prices and his administration’s stance against the expansion of fossil fuel extraction, which is part of a larger effort to curb the worst effects of human-induced climate change. In the Tuesday address where he announced a ban on Russian oil imports, Biden called the cost increases “Putin’s price hike.”
"It's simply not true that my administration or policies are holding back domestic energy production," Biden said. "That's simply not true. Even amid the pandemic, companies in the United States pumped more oil during my first year in office than they did during my predecessor's first year. We're approaching record levels of oil and gas production in the United States."
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