Does OPEC Have America Over a Barrel?

Former Shell Oil president on surging oil prices


NEIL CAVUTO, HOST OF “YOUR WORLD”: In the meantime, do you need more proof of this phenomenon? Just look at oil. It is spiking, back in triple-digit territory, as OPEC starts fiddling.

And former Shell Oil president John Hofmeister here worrying.

John, what do we do? Because this looks like a trend here.

JOHN HOFMEISTER, FORMER CEO, SHELL OIL: Well, I don’t think there was any chance that OPEC was going to reach agreement, any more than our United States Congress is going to reach agreement on an energy policy.

Neil, consumers have got to take this into their own hands. The only solution is for consumes to demand that this government, the United States government, get to work on an energy policy that produces more domestic energy. OPEC’s not going to take care of us.

And for the president of the United States to think that he has influence with OPEC, he better rethink how much authority he really has. It’s the American voter, the American consumer that has the most at risk, the most to gain from a government that does what the people need, which is produce more domestic energy.

CAVUTO: We should step back a second and we should explain that OPEC is -- met today to try to agree on a proper production level. They couldn’t agree to that.

And I’m wondering, though, is it really in their interest to stick it too much to us? Because they’ve done that before and they have regretted it. In other words, it leads to either a global recession or worse.

HOFMEISTER: Well, I think that they are playing with risk. There’s no question about it. But, because they are so divided amongst themselves, with the truly anti-, anti-American crowd, the Venezuelans, the Iranians, and others, against the more statesmanlike group, like the Saudis and the UAE and some others, who are trying to talk some rational economic sense, but there’s no outcome that’s going to benefit consumers any time soon.

Meanwhile, what the American consumer needs to understand, even if Americans cut back, the demand for crude oil is going to continue to rise because China’s economy, growing at or near double digits, is going to require millions of new barrels of oil, not just this year and next year and the following year, but well into the future. And so this trend...

CAVUTO: Well, isn’t our solution, though, yesterday one proposed by the GM CEO, hike gas prices a buck a gallon. Maybe they will buy more plug-in cars, like the Chevy Volt?

What do you think of that?

HOFMEISTER: I think that’s arrogant elitism, just to be blunt. Half of American lives on less than $38,000 a year. For a corporate executive to come out and say charge the American people more money, what is he thinking? Americans can’t afford more money, Neil. They don’t have it. And because he does and he’s willing to pay a dollar tax, shame on him, relative to what is right for the American people.

CAVUTO: John Hofmeister, thank you very much. Come out of your shell. It seems to be working, John.


HOFMEISTER: Thank you.

CAVUTO: Always good seeing you.

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