Have you seen the prices at the pump lately?

Hey there, friends! Let's talk about something we all notice every day but might not always think about deeply: gas prices. Have you seen the prices at the pump lately? They're at their highest level in 10 months! And guess what? This situation is turning into a heated topic, especially as we approach election season.

Why Are Gas Prices Soaring?

Saudi Arabia is cutting production, Russia's curbing exports, and the U.S. economy is actually doing better than expected. All these factors are tightening the oil market, driving up the price. Remember how fuel costs were pretty modest through May and June? Well, not anymore! It seems like every time we turn around, there's another reminder of how inflation is chipping away at our hard-earned money.

And of course, this brings us to politics.

Politics and Pump Prices

I recently caught up with Patrick DeHaan, the head of petroleum analysis at Gas Buddy. He made an interesting observation: “Americans have been very quick to blame the White House” for past price spikes. He believes this is going to be a tricky issue for President Biden, especially if gas goes above $4 a gallon.

To give you some perspective, unleaded gas is now averaging around $3.875 a gallon, according to AAA. That's flirting with the scary $4 mark! But hey, it's still better than last summer when the national average reached a jaw-dropping $5 a gallon.

The Republican Response

Republicans aren't missing this opportunity. From Washington to Iowa, they're pointing fingers at Biden's environmental policies, like the move to revoke the permit for the Keystone XL pipeline in 2021, and reducing oil and gas leasing on federal lands.

House Speaker Kevin McCarthy even went on to say, “President Biden has forced Americans to bear the cost of his radical agenda.” The term he used? “Bidenomics.” It seems like pump prices, one of the most tangible signs of inflation, are becoming a key issue for voters.

Benjamin Salisbury, director of research at Height Capital Markets, put it rather well: “It's the only thing you buy where you stand there and the numbers scroll by.” It really does have a significant impact on us as consumers and voters.

The Effect on Biden

Now, don't get me wrong; it's not just about gas prices. Polling shows that the economy is weighing heavily on the president's approval rating. James Lucier, managing director at research group Capital Alpha Partners, noted that Biden appears “more vulnerable because of the perception that inflation and the economy have been worse under him.”

Even former Vice President Mike Pence chimed in at the Iowa state fair, emphasizing high gasoline prices and calling for more oil leasing and fewer regulations. His message? Biden is waging a “war on energy.”

What's Happening at the White House?

So, is the White House concerned? You bet! They even delayed a plan to replenish the nation's emergency reserve as oil futures climbed above $80 a barrel. They're surely aware that these prices could further fuel the crude rally.

Biden's Pitch and the Green Transition

For President Biden, the stakes are high. His campaign pitch and the Inflation Reduction Act – focusing on steering billions toward electric vehicles and clean-energy resources – are all about "economic growth" and a green transition to protect us from volatile energy prices.

However, for some voters, this might feel like a disconnect with today's gasoline prices. As Salisbury said, Biden seems to be “wrapped his political identity around transition, rather than mitigation.”