Saturday, April 7, 2012

Biden Explains the International Oil Market

Following a speech in Norfolk, Virginia on college affordability, Vice President Joe Biden opened up the forum for a little Q and A with the assembled high school students. Never at a loss for words, the vice president dove into the deep end of the pool when he was asked by a Maury High School student why gas prices are so high:
Hey, man…he obviously has a car. Hey look, it’s complicated. You’d fully understand it. I’m going to give you a brief answer and remembering that famous admonition of Samuel Clemens. He said all generalizations are false, including this one. But I’m going to give you as quick and as straight as I can:

Number one, number one, the international, to use a fancy word, exigencies of the oil market are amazing. For example every time there’s talk about war with Iran, a major oil producer, because Iran says if there is war, they will take out the Saudi oil fields, and the Bahraini oil fields, they will attack them, every investor, the big guys who make these judgments about the futures, it’s called the futures market, who say well look… we’ve got a hedge a boom happening, so we’ve got to assume that oil may go to, it’s not high, artificially high at over $100 dollars a barrel. It could go to $200 a barrel, and so…and all that what it does, it drives up the price of oil in anticipation there is enough supply. And so what’s going on now are two things that no president, Democrat or Republican, can control. One is called the Arab Spring. You all know about that. What happened in Libya, what happened in Tunisia, what happened in Egypt. What happened in Bahrain is happening now, etc. Now they are the oil, some of the biggest oil producers in the world. So when the war in Libya occurred, Libya was a producer of a significant amount of oil. When the rebels attacked, and the world supported them, that oil came to a screeching halt. So that was a lot less oil on the international market.

I’m treating this answer like I would if I were answering on Meet the Press.

I hope I’m not offending anybody by just going straight to it, but here’s the deal, oil is what they call fungible. That means that it has a world price. The price for oil in Saudi Arabia, and a price for oil in Canada and a price for oil in Latin America, it’s all one price, because you can go anywhere and pick it up. So it’s all the same price. Now what’s happened is that as this discontents occur, no one knows where that Arab Spring is going to go....

And it went on... and on... and on...


Mark Steyn was so in stitches listening to this explanation that he was barely able to respond to Hugh Hewitt.


  1. Gee, glad he was answering as 'quick and straight' as he could. How many eyes glazed over with this Biden gem?

  2. Fungible, Mr. Vice President, means that one unit can be exchanged for another. A barrel of oil is a barrel of oil, whether it be in Saudi Arabia or the Gulf Coast. Currency is fungible. If I borrow a five dollar bill from Terrance, I could pay him back later with another five dollar bill, but it wouldn't have to be the same five dollar bill. He might feel differently if I had borrowed his lawn mower.

  3. The sad news is he was treating his answer as though her were on "Meet the Press". Oy vey!

  4. What every member of the Obama Administration--including The One himself--knows about business and economics can fit in a hydrogen nucleus. I've never hoped for change more in my lfe.

    And I’ve been saying for the last few weeks, and I want everybody to understand this, we use 20 percent of the world’s oil; we only produce 2 percent of the world’s oil.

    Barack Obama, March 22, 2012, Cushing, OK.

    1.Russia – 10.5 million b/d, 12.0% of world total
    2.Saudi Arabia – 8.8 million b/d, 10.0% of world total
    3.United States – 7.8 million b/d, 8.9% of world total
    4.Iran – 4.2 million b/d, 4.8% of world total
    5.China – 4.0 million b/d, 4.6% of world total

    The man is a living gaffe machine.