Markets are being spooked right now by Saudi Arabia’s decision to join Russia in cutting oil supplies.
If oil prices stay high or go higher, analysts say, the economy may go into recession, and President Biden’s re-election will be threatened.
I think there’s one weird trick that can prove a decisive point in world history.
Lean into it.
Accept higher oil prices. Note that American oil companies benefit. Explain that higher prices, and lower consumption, are essential in the fight against climate change. Highlight the growing cost disparity between fossil fuels and renewable energy, which continues to grow.
The Sauds and Russians think they have us over an oil barrel.
We should make this a decisive moment for putting them over one.
There will be short-term pain because the analysts are right. Higher oil prices could tank the economy. They could cause a recession.
But, like the song says, your creature comforts aren’t the only things worth fighting for. The point of Biden’s economic policy has been to create American supply chains in energy, transportation, and manufacturing. The money to build these supply chains is being spent, supported by billions in private investment.
Better batteries, made with metals other than lithium, are coming. So are more efficient solar panels, made with cheap perovskites rather than just silicon.
The Saud move offers us a chance to get a return on this investment, faster than we otherwise would. You will notice that the oil journal oilprice.com isn’t spooked by this move and is featuring a lot of stories now about renewables.
It’s also great news for the planet.
This is a gift from God, not a plague.
