"New York Senate Democrat Chuck Schumer wants Saudi Arabia to pledge to make up for any missing Iranian supplies, and he wants them to do it now, rather than waiting until summer. 'A public commitment will cause the price of oil to drop right away,' he said Tuesday."
Senator Schumer is correct, oil markets are forward looking and a public commitment to development matters. But rather than Saudi Arabia, let’s look at what the U.S. is signaling.
- Continued reduced production on Federal areas in the Gulf of Mexico.
- 87% of our offshore acreage being placed off-limits.
- Federal permits lagging in offshore areas.
- Federal permits lagging in onshore areas.
- A million barrels a day from ANWR languishing for decades.
- The U.S. blocking upwards of 800,000 barrels a day from Canada.
- A plan for increasing taxes on U.S. exploration and development, and when you tax something, what do you get? Less of it.
- And three years worth of delays and obstructions of oil and natural gas development in the U.S.
It is great that Senator Schumer wants Saudi Arabia to send a signal to the market, as the chart here shows, signals do matter, but perhaps a better signal to the market would be that the U.S. is going to do everything we can to help ourselves. We are not powerless, unless we choose to be.