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Inside Biden's Oil Trade

Fearing an energy crisis following Russia’s invasion of Ukraine, a little-known policy wonk convinced the Biden Administration to help drive down oil prices by using the US’s government emergency supply of oil in a radical new way.

You might remember that a few months ago, this newsletter called Joe Biden the U.S.’s Commodity-Trader-In-Chief

In this week’s episode of The Closer, we have the inside story of how the U.S. Government got into the oil business. To get it, we talked to Skanda Amarnath, who crafted the oil policy that the White House effectively adopted.

In 2021 and 2022, Skanda, a econ wonk who runs a DC think tank called Employ America, had been paying really close attention to rising inflation and what could be done about it. That’s because he advocates for policies that lead to jobs and he was worried that the Federal Reserve, in an effort to fight inflation, would raise interest rates so much that the economy would tip into a recession, causing millions of people to lose their jobs.

And he started to pay a lot of attention to the rising cost of oil and how that was feeding inflation.

So when Vladimir Putin announced in February 2022 that Russia was invading Ukraine, Skanda knew it was the time do something – the world was in for a massive energy shock and the U.S. didn’t have the tool it needed to respond. 

So he got busy creating one. In March 2022, Employ America released its plan. Skanda argued that the U.S. shouldn’t just release oil from the Strategic Petroleum Reserve, as President’s had during natural disasters and global crises, it should also publicly say that it would buy oil when prices fell. The idea was to give the American oil industry – now the largest producer of oil in the world – some financial certainty so they would open the spigot. 

Listen now to how Skanda pushed and prodded and eventually, convinced the White House to adopt a plan that closely mirrored the one he created. 

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