• Biden went to OPEC+ hat-in-hand; OPEC+ took a dump in it.
• The “English majors” running the USG have no idea how the world works.
• To put it plainly, the Saudis sided with the Russians. Who can blame them?

Good morning on another brisk morning in Piedmont!

Don’t you love those mornings when you wake up laughing?

Sometimes, my dreams are so delightful that I bounce out of bed.

But today, I woke up laughing… about Joke Biden and his latest diplomatic failure.

My paisano, Mark Rossano, the “Sherlock of the Supply Chain,” emailed me saying, “This is like a bad SNL skit.”

My first thought was, “Aren’t they all nowadays?”

My second thought was, “Handshakes are better than fist bumps.”

Credit: ChéNN

I bet MBS - that’s Saudi’s ruling Crown Prince Mohammed bin Salman Al Saud pictured above - is laughing his ass off.

And by extension, Pooty Poot shoved a rocket up Biden’s derriere without hitting a red button.

They must be pleased with themselves.

It’s clear that the US’s negotiating, or soft, power has eroded to the point that it must use hard power to get what it wants.

And that’s too bad because the US has abused its hard power for decades now.

In this Rude, I’ll look at what happened, what’s likely to happen because of OPEC+ cutting by 2 million barrels per day, and how it will affect the markets.

Please, Sir, I Want Some More

It’s hilarious for me to picture the MBS as the master and Biden as Oliver Twist. But that’s the first thing that came to my mind.

If you recall, Oliver was living in an orphanage on “three meals of thin gruel a day, with an onion twice a week, and half a roll on Sundays.”

Amazed at his audacity, Oliver asked for “some more” one day.

Because of Oliver’s boldness, the uproar that ensued is one of Dickens’ funnier passages.

There was no such uproar yesterday.

Saudi, Russia, and the rest of OPEC+ just laughed.

The Ask

Rumors swirled that OPEC+ was going to cut production.

That’s not because they wanted to humiliate Biden and hurt the US.

Biden’s US policies have already done that. And with those stupid policies have come a worldwide recession.

So, OPEC+ cutting production is a natural response to a considerable decrease in demand for oil.

Even Foreign Policy, the Council on Foreign Relations mouthpiece, said as much:

The reason for the cuts, despite protestations from the White House, is not punitive politics. Rather, it’s the specter of a looming global recession that will cut deeply into global oil demand. Last week, Goldman Sachs cut its 2023 oil price forecast from an earlier prediction of $125 per barrel to $108, following a sluggish global demand for oil, which was exacerbated by central banks tightening rates worldwide.

But this highlights a problem with the US government in general.

It expects OPEC+ to serve the USG’s interests instead of its own.

And that’s just not how economics works.

Of course, the Democrats spit out their pacifiers with idiotic quotes like these:

“I thought the whole point of selling arms to the Gulf States despite their human rights abuses, nonsensical Yemen War, working against US interests in Libya, Sudan, etc., was that when an international crisis came, the Gulf could choose America over Russia/China,” tweeted Democratic Senator Chris Murphy.

“President Biden should make it clear that we will stop supplying the Saudis with weapons and air parts if they fleece the American people and strengthen Putin by making drastic production cuts. They need us far more than we need them,” said Congressman Ro Khanna, a progressive Democrat.

The Humiliation

Joke Biden must be the worst poker player around.

Instead of taking the production cuts as a personal insult and allowing his White House staff to shit the bed in the press, he should have shrugged it off.

He might have said something like, “Well, it’s not ideal. But I understand. I look forward to OPEC+ increasing production in the future.”

Now, he’s cornered.

Going forward, Biden must look like he’s retaliating.

That’s only going to make the situation worse.

Here’s the statement from National Security Advisor Jake Sullivan and NEC Director Brian Deese the White House released (bolds mine):

The President is disappointed by the shortsighted decision by OPEC+ to cut production quotas while the global economy is dealing with the continued negative impact of Putin’s invasion of Ukraine. At a time when maintaining a global supply of energy is of paramount importance, this decision will have the most negative impact on lower- and middle-income countries that are already reeling from elevated energy prices.

The President's work here at home, and with allies around the world, has helped to bring down U.S. gas prices: since the beginning of the summer, gas prices are down $1.20 - and the most common price at gas stations today is $3.29/gallon. At the President’s direction, the Department of Energy will deliver another 10 million barrels from the Strategic Petroleum Reserve to the market next month, continuing the historic releases the President ordered in March.

The President will continue to direct SPR releases as appropriate to protect American consumers and promote energy security, and he is directing the Secretary of Energy to explore any additional responsible actions to continue increasing domestic production in the immediate term. The President is also calling on U.S. energy companies to keep bringing pump prices down by closing the historically large gap between wholesale and retail gas prices — so that American consumers are paying less at the pump.

In light of today’s action, the Biden Administration will also consult with Congress on additional tools and authorities to reduce OPEC's control over energy prices.

Finally, today’s announcement is a reminder of why it is so critical that the United States reduce its reliance on foreign sources of fossil fuels. With the passage of the Inflation Reduction Act, the U.S. is now poised to make the most significant investment ever in accelerating the clean energy transition while increasing energy security, by increasing our reliance on American-made and American-produced clean energy and energy technologies.

Ah, funny, they should mention the SPR…

What’s adding to Biden’s angst is he tapping into the Strategic Petroleum Reserve a little too deeply.

The “number of barrels” goes over people’s heads.

But “days remaining” doesn’t.

Credit: ZeroHedge

After Biden’s release, the US only had three weeks left.

There’s not much more to release. Besides, it mostly has a symbolic effect, not a real pricing effect.

The other laughable thing is that Biden and his ilk have no idea how the gas pump actually works.

Gas stations make little to no money off gas itself. That’s why they all have stores attached to them.

Gas station owners have little to no pricing power.

So, Biden blaming them makes as much sense as calling it a “Putin price hike.”

By the way, the below looks like a meme. But it’s not. It’s an actual exchange—my God.

Wrap Up

Americans and Europeans are victims of bad governance.

Oil-producing countries aren’t willing to bail out American and European consumers over bad American (and vassal) policy.

Who can blame them?

That’s why November’s vote is crucial. Sure, it won’t solve all the problems out there.

But it will send a clear message.

Until tomorrow.