Global oil supplies are becoming more unstable under the Biden administration as Sudan breakouts out in all-out war, states Phil Flynn of PRICE Futures Group.

The Biden administration had to once again evacuate another US embassy which is the fourth embassy under him to do so. While Sudan’s oil exports are only 132,000 barrels a day, it is a pattern that under Biden, the US economy is becoming more vulnerable to oil price spikes because of his foreign policy. First, it was the Biden administration that had a failed pull out of Afghanistan that left 13 US soldiers dead when he pulled out without notifying our allies and inexplicably gave up the Bagram Air Base which experts agree was a major mistake.

While the Biden administration tried to blame the Trump Administration for the problems, the reality is that Biden wanted to end the War in Afghanistan so he could take credit it for it and celebrate the war’s anniversary. Trump did not force Biden to withdraw without notifying our allies, nor did he advise them to give up the Bagram airbase. Then the Russian invasion of Ukraine happened after Biden seemed to invite a “minor incursion” that caused the closing of the Ukrainian embassy. While the embassy did reopen, the US also had to flee the US embassy in Belarus.

Biden’s handling of relations with long-time US ally Saudi Arabia has proven to be a disaster. His declaration that he was going to make Saudi Arabia a pariah state failed to recognize the importance of Saudi Arabia as a strategic partner in the Middle East. While nobody condones Crown Prices Mohammed bin Salman Al Saud's murder of Jamal Khashoggi, a Saudi dissident, and US Citizen, the heavy-handed bull in a China shop diplomacy forced Saudi Arabia to grow closer with our advisors. Not only have they grown closer with Russia but are creating a long-term alliance with China.

Biden’s foreign policy is also pushing Saudi Arabia to make friends with its long-term nemesis Iran. The warming of relations between Saudi Arabia and Iran creates even more issues for the US energy sector.

The Wall Street Journal reports today for example that, “Russian ships are ferrying large quantities of Iranian artillery shells and other ammunition across the Caspian Sea to resupply troops fighting in Ukraine, Middle East officials said, posing a growing challenge for the U.S. and its allies as they try to disrupt cooperation between Moscow and Tehran. Over the past six months, cargo ships have carried more than 300,000 artillery shells and a million rounds of ammunition from Iran to Russia, according to the officials and documents viewed by The Wall Street Journal. Intelligence about the shipments has been shared with the US, people familiar with the matter said.

Biden’s war on fossil fuels caused increased prices but that was their plan. Breitbart reports that “On Friday’s broadcast of MSNBC’s “Andrea Mitchell Reports,” Special Presidential Envoy for Climate John Kerry stated that wind and solar power will become “far more price competitive than oil and gas” if oil and gas companies see their costs rise because they “have to spend huge amounts of money for carbon capture and storage and utilization.” Kerry said, “I would say to you, Andrea, that, frankly, I’m surprised, pleasantly, on the positive side, by the number of things that are just taking hold. We see remarkable progress in batteries and battery storage. We’re seeing the price of wind and solar coming down still, even as the technology is getting better, and it’s going to be far more price competitive than oil and gas if they have to spend huge amounts of money for carbon capture and storage and utilization. We don’t know the answer to some of those questions now. The marketplace is chasing solutions, but that is creating jobs, it’s creating economic opportunity.

Yet what we are really seeing in this quest to save the planet is trillions of dollars being spent with much of the money going to green energy gambles that will not pay off. It will make the US economy less efficient as we reduce the reliability of our energy infrastructure.

My buddy Mike Shedlock of Mish Talk pointed out that, “When there are a trillion dollars of clean energy-free money handouts sloshing around, suitors are lining up from around the globe to get their share.  MISH Talk writes that, “The Wall Street Journal reports Small Towns Chase America’s $3 Trillion Climate Gold Rush. As an example, “In December, Colleton snagged a $279 million investment from Kontrolmatik Technologies Energy and Engineering, a Turkish firm that is hoping to get nearly $1 billion in federal tax credits over the next decade by building a battery-making plant in the US Kontrolmatik wants to tap into the renewable energy sector’s need to store electricity for release onto the grid when the sun isn’t shining or the wind isn’t blowing. “I’ll be honest, I have no idea what a gigawatt-hour is,” Colleton County Council Chairman Steven D. Murdaugh told local leaders at a February groundbreaking ceremony. “But I do know what a $279 million investment will do for our county, and I know what impact 575 jobs will have on our community.” MISH does the math for a $275 million investment and $1 billion in tax credits you get 575 jobs created at a cost of $1,739,130 in tax credits per job created.

MISH in his piece pointed out that wind turbines are only profitable with subsidies. As an example he wrote that “In 2007, state and local leaders offered millions of dollars in loans and tax credits to attract TPI Composites Inc., a wind-turbine blade maker, to Newton, Iowa, to make up for the closure of a big Maytag appliances plant. The next year they offered more than a million dollars to a manufacturer of wind towers that was the predecessor of Texas-based Arcosa Inc. But by 2021, TPI’s Newton plant was struggling from the high costs of US manufacturing and the looming expiration of a federal tax-credit program. That December, TPI closed the plant. Meanwhile, the expiring tax credits also hit Arcosa’s sales, and the Iowa factory laid off more than 80 workers.

At TPI, CEO Bill Siwek said his company could get tax credits totaling around $80,000 per blade—enough to wipe out the labor cost differential with other countries “and then some.” He hopes to rehire many of the plant’s roughly 1,000 former workers, although he said it’s still unclear what will happen when federal subsidies go away in around 10 years. Mish does the “Uncertain Wind Turbine Blade Math.” $80,000 per blade in subsidies/1,000 employees Missing info on how many blades the company can make What happens after subsidies expire in 10 years Modern Wind Turbine Blades/Modern Wind Turbine Blades. Please consider How Much Does One Wind Turbine Blade Costs? A typical wind turbine blade can cost around $154,000 (NREL) but this includes the costs of materials, the wind turbine manufacturers’ labor costs, and maintenance. The initial purchase cost is around half of this total, at $73,600. For larger wind turbines, which require longer blades, the blade cost can increase to as much as $500,000. Wiley estimates that there are around 3800 wind turbine blade failures each year, which accounts for around 0.54% of all blades in existence.

MISH also points out in his must-read that, “Biden Struggles to Convince People to Buy EVs, Only 12% Seriously Considering Meanwhile, please note Biden Struggles to Convince People to Buy EVs, Only 12% Seriously Considering. Also consider Pulling CO2 From the Air, a Giant Sucking Sound of Environmental Madness.

Oil and oil products seem to be consolidating right now in very tight trading ranges. The market seems to want to see more information on the US oil inventory data as well as get a direction on which way the Federal Reserve is going to go the other thing that oil traders are talking about is the Chinese May Day holiday.

The Global Times says that “China’s domestic consumption is expected to further revive during the “upcoming May Day holidays, which will fall from April 29 to May 3, amid a boom in travel. Industry insiders expect an explosive market response in the tourism sector to inject more momentum into domestic consumption, signaling Chinese consumers’ confidence in the nation’s economic recovery with strengthened government support. As of April 20, searches for domestic flights on Chinese online travel service had risen more than 290% year-on-year, while recovering to 110% in the same period in 2019. Searches for hotels increased more than nine times year-on-year and nearly doubled compared with 2019, data shared with the Global Times by showed.

More than 8% of those surveyed plan to travel during the holidays, compared with just 38.1% last year, data from the iiMedia Research Institute showed. So far this year, China’s domestic tourism industry has basically recovered to the same level—and in some cases beyond—as in 2019, and another boost is expected for the May Day holidays, Xu Xiaolei, marketing manager at China’s CYTS Tours Holding Co, told the Global Times on Sunday, adding that the sector is likely to achieve a further recovery.

Natural gas should continue to get support from the weather. We look to see a 76 injection this week.

Learn more about Phil Flynn by visiting Price Futures Group.