White House summons oil executives to Washington and says they’re hoping for more than ‘just yelling’

Be part of a series of action this week on gas pricesThe Biden administration has summoned the heads of seven top oil refineries to Washington after a tense week of back and forth with industry leaders.

CEOs will meet Energy Secretary Jennifer Granholm after the president blow up their high profits was “unacceptable” in a recent letter to the companies. In one answer, Chevron (CVX) push back by saying that Washington’s approach is actually the culprit for the high prices.

However, aides to President Joe Biden say they hope to have a constructive conversation.

“Let’s put all the ideas on the table so this is not the president just yelling,” senior White House adviser Gene Sperling told Yahoo Finance Live on Wednesday. He added that Biden will “put out a stark message to everyone that do all you can, but the goal is the result.”

Gasoline prices have skyrocketed in recent months, with the most recent data from the American Automobile Association shows prices hovering around $5 a gallon. This increase was driven by a range of factors, most notably disruptions in global oil markets following Russia’s invasion of Ukraine.

The companies in the spotlight besides Chevron, all of which received a letter from the president last week, are Marathon (MRO), Valero (VLO), ExxonMobil (XOM), Phillips 66 (PSX), BP and Shell (SHELF).

WASHINGTON, DC - June 22 (LR) White House Press Secretary Karine Jean-Pierre watches over US Energy Secretary Jennifer Granholm speaking during the daily White House press conference on June 22, 2022 in Washington, DC.  Granholm discussed the administration's response to rising gas prices.  (Photo by Drew Angerer / Getty Images)

Energy Secretary Jennifer Granholm previewed her upcoming meeting with oil executives at the White House on June 22. (Photo Drew Angerer/Getty)

“I hope they will discuss with some practical ideas and practical steps in the near future,” said Biden, who does not plan to attend the meeting, in a speech on Wednesday.

‘We need an honest dialogue’

The White House’s main push has been for companies to ease what they see as a refining bottleneck, the middle link between crude oil production and gas pumping. The administration contends that some refining capacity has been taken offline during the pandemic and has not returned quickly enough.

Chevron blamed regulatory problems and a lack of clarity from DC. “We need an honest dialogue,” said Chevron CEO Michael Wirth, who will be attending the meeting, wrote recently.

Industry observers have also been skeptical about how much room oil companies really have – and how quickly things can change in the short term. They noted that the raw processing was running at 93%-94% of maximum theoretical operating capacity in recent weeks.

“We’re going to get into this to have a serious conversation… Let’s see how that conversation goes,” Granholm said during a press conference before a question about how she would respond if refiners “didn’t play ball.” She did not rule out using the Defense Production Act to force oil companies to increase supply, which could ultimately push prices down.

A senior administration official, in previewing the hearing, said they hoped the discussion would include “ways that the federal government can be helpful to get that additional capacity online as quickly as possible.” good.”

Oil experts predict prices will decrease slightly in the coming dayslargely due to market forces, perhaps to reduce tension at the meeting with industry executives.

Sperling echoed the Biden team’s hope that getting everyone in one room could lead to progress. However, he stressed, “I don’t think people should be offended because the president is standing up for consumers who are being strangled at the gas pump.”

Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.

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