By Tom Ozimek and Paul Greaney
New York billionaire and refiner John Catsimatidis said that if the Biden administration reversed its hostile attitude toward oil and fossil fuels, America could “100 percent” avoid falling into a recession and inflation would ease.
Catsimatidis made the remarks in a recent interview on The Epoch Times’ sister media NTD, in which he expressed concern about the ability of the Biden administration to shepherd the country through various economic, environmental, and geopolitical crises.
The United Refining Company CEO said that the Biden administration’s hostile attitude to fossil fuels is a key factor that threatens to push America deeper into recession.
“Right now, Washington and the White House have made their mind up that the world will be better off without fossil fuels,” he said. “I think Biden is 100 percent wrong.”
Catsimatidis believes that boosting U.S. domestic oil production would help solve a number of problems—including soaring inflation and aggressive rate hikes hammering the economy—by lowering energy prices.
He also believes lower oil prices would thin Russian President Vladimir Putin’s war chest and take some of the steam out of the Russia–Ukraine conflict.
“Right now, Putin at $100 a barrel is probably making a billion dollars a day, so he wins,” Catsimatidis said.
OPEC Production Cuts?
President Joe Biden has been pushing OPEC to boost production, with limited effect. Recent rumors, as reported by Reuters, indicate that the oil cartel may now be mulling an output cut of more than a million barrels a day.
“The OPEC ministers are not going to come to Austria for the first time in two years to do nothing. So there’s going to be a cut of some historic kind,” Dan Pickering, CIO of Pickering Energy Partners, told CNBC in an interview, referring to the oil cartel’s plans to meet in Austria on Oct. 5 for their first in-person meeting since the pandemic began.
Pickering believes OPEC will ultimately settle on a cut of 500,000 barrels per day, which he said would help prop up oil prices in the near term.
Brent crude and West Texas Intermediate (WTI) futures were both up around 1 percent, as of 7:19 a.m. EST, on Oct. 4. Brent was trading at $89.55 per barrel, while WTI was trading at $84.12 per barrel.
Stephen Brennock of oil broker PVM told Reuters that “$90 oil is non-negotiable for the OPEC+ leadership, hence they will act to safeguard this price floor.”
Given its oil production cost structures, Catsimatidis said that OPEC would rather sell a bit less oil for $100 a barrel than a bt more for $75 a barrel “because they make more money.”
On balance, however, high oil prices are neither good for the United States nor for its European and Asian allies, Catsimatidis said.
“I am very concerned about our people in Washington, that they don’t properly know how to handle situations like this,” referring to the prospect of OPEC production cuts.
The United States and Canada can jointly produce around 20–21 million barrels per day, he said, and “then the world has more oil.”
“We don’t have to beg Venezuela or Iran or Saudi Arabia, and we can actually make enough to export to Europe,” he continued.
The problem was created when Biden “became president and shut down the pipelines and made fossil fuels the enemy of the people,” Catsimatidis argued.
“I think the people of Europe, the people of Asia, the people of United States and North America are all going to suffer because of some of the stupid things our politicians are doing,” he added.
Catsimatidis acknowledged the problem of climate change, but said it’s a long-term process, and trying to address it with short-term fixes like cutting fossil fuel use is “very stupid.”
‘Fix the Problem With Oil’
Asked about the role high energy prices were playing in the current economic downturn the United States and other economies are facing, Catsimatidis said that boosting oil output would not only lower inflation but also counteract the need for central banks to hiking interest rates aggressively.
“The solution is fix the problem with oil, and you don’t have to raise interest rates,” he said.
Aggressive rate hikes are going to push the U.S. economy deeper into a downturn and will “hurt the whole world,” he said.
Asked whether it’s possible for the United States to avoid recession entirely if the Biden administration were to adopt a more friendly attitude toward fossil fuels, Catsimatidis replied, “100 percent.”
His remarks came as the United Nations Conference on Trade and Development (UNCTAD) warned that continued rate hikes by the Federal Reserve and other central banks threaten a global recession and “worse damage than the financial crisis of 2008 and the COVID-19 shock in 2020.”
UNCTAD criticized aggressive rate hikes as an “imprudent gamble” that could “usher in a period of stagnation and economic instability for many developing countries and some developed ones.”
The Federal Reserve recently raised rates by 75 basis points, to a range of 3.0–3.25 percent, with Fed officials predicting rates to go even higher and remain at restrictive levels for some time.