The International Energy Agency (IEA) somehow seems shocked that the world is headed for a major oil shock, says Phil Flynn of the PRICE Futures Group.

Yet all they had to do is attend some of my Money Show webinars and read my Energy Report or listen to my interviews on the Fox Business Network to know that this was inevitable. The IEA lost its focus, and 200 million barrels of oil, and became a shill for the green energy movement. Now on Saint Patrick’s Day, I usually do not have anything bad to say about green! But in this case, I will make an exception.

The IEA gave Europe the false impression that they could do without fossil fuels. That left Europe vulnerable. They sold Europe on the green agenda because the green energy movement has a hankering for the green as in green money. It is not about energy efficacy or energy security, it was the push for the green in the name of saving the planet, which meant that everyone would have to pay more green and the green energy folks would get full of the green along with a pot o’ gold.

The Biden administration started to implement the same type of green Paris Climate accord-like plans, and openly shamed oil companies and oil investors. That discouraged investment, helping add to the global oil shortfall. Oil prices are also rallying on news that China is reopening some cities after a Covid scare and reduced hopes for a ceasefire deal in Ukraine. Yet behind the seams of this so-called Putin rally, this has been an energy crisis created by stupid and shortsighted energy policy.

The IEA reports say, “Faced with what could turn into the biggest supply crisis in decades, global energy markets are at a crossroads. Russia’s invasion of Ukraine has brought energy security back to the forefront of political agendas as commodity prices surge to new heights. While it is still too early to know how events will unfold, the crisis may result in lasting changes to energy markets. The implication of a potential loss of Russian oil exports to global markets cannot be understated. Russia is the world’s largest oil exporter, shipping eight mb/d of crude and refined oil products to customers across the globe."

Unprecedented sanctions imposed on Russia to exclude energy trade for the most part, but major oil companies, trading houses, shipping firms, and banks have backed away from doing business with the country. For now, we see the potential for a shut-in of three mb/d of Russian oil supply starting from April, but losses could increase should restrictions or public condemnation escalate.

For products, the IEA says that, “Refiners, particularly in Europe, are scrambling to source alternative supplies and risk having to reduce activity just as very tight oil product markets hit consumers. There are scant signs of increased supplies coming from the Middle East, or of a significant reallocation of trade flows. The OPEC+ alliance agreed on March second to stick with a modest, scheduled output rise of 400 kb/d for April, insisting no supply shortage exists. Saudi Arabia and the UAE—the only producers with substantial spare capacity—are, so far, showing no willingness to tap into their reserves.

Why would they? The Biden administration wanted to make Saudi Arabia a pariah sate and Russia has made itself a pariah state. In the meantime, OPEC is calling the shots because they control the bulk of spare oil production capacity. US energy could have helped but they continue to get bashed and maligned by the Biden administration at every turn.

The latest outrage against the US energy industry is the false accusations by the president that US oil companies are profiteering on the Russia-Ukraine war. Biden tweeted: "Oil prices are decreasing, gas prices should too. Last time oil was $96 a barrel, gas was $3.62 a gallon. Now it’s $4.31. Oil and gas companies shouldn’t pad their profits at the expense of hardworking Americans." As Joe Biden would say, that is just plain malarky. In fact if you look at the charts, actually the rise in gas price at the pump did not keep up with the increase in the price of crude. Energy companies made less profits on the price spike, not more. Biden needs to quit smearing the US oil and gas industry and its workers.

It is not true, they deserve an apology.

At least for natural gas, the Biden administration did this right and is supportive for natural gas. The Hill reported that the Biden administration said Tuesday that it would issue orders that expand the amount of liquified natural gas (LNG) that it exports as Europe seeks to reduce its reliance on Russian gas. The Energy Department said that two authorizations it issued would give two facilities the ability to export an additional 720 million cubic feet per day of natural gas. In the first half of last year, the US exported an average of 9.6 billion cubic feet per day. The department said that its latest move would give every US LNG export project the ability to export at full capacity.

Hedgers need to continue to hedge on breaks. Despite the sell off, upside risks remain. We have advocated being hedged for over a year and we continue to believe that needs to be done.

Learn more about Phil Flynn by visiting Price Futures Group.