President Joe Biden’s recently unveiled a tax plan to accompany his $2 trillion infrastructure proposal that takes direct aim at fossil fuel subsidies in favor of clean energy incentives. The “Made in America Tax Plan” is set to raise the corporate income tax rate from 21% to 28% and replace fossil fuel subsidies with clean energy incentives. The plan outlines several clean energy tax credits, including a 10-year extension of wind, solar, and battery tax credits, but does not specify which fossil fuel subsidies could face the chopping block.

A price war may be looming in the global oil market as rising output from OPEC+ and the Middle East boosts the competitiveness of the region’s shipments, potentially forcing other suppliers to discount their barrels. The warning signs can be seen in the widening of a key price spread that’s used by traders to determine the affordability of cargoes from the Middle East against Brent-linked barrels. Right now, the gap is close to the widest it has been in more than 16 months, and that doesn’t bode well for oil that’s priced against Brent.

Hopes were high as the world entered a new year that 2021 was going to be the year that things went back to “normal,” but the first few months made those hopes seem like a far fetched idea. Improved economic activity and global mobility in the first quarter of 2021 was stalled by slow vaccine rollouts around the world and a stubborn third wave of lockdowns imposed throughout Europe. Luckily the second quarter has seen an explosion in global crude oil demand as vaccination campaigns have picked up the pace and travelers worldwide seem to have caught the summer travel bug. While the timeline to pre-crisis demand has been delayed, people around the world will still need plastics for their daily activities, roads and vehicles to travel from place to place, goods and services created and shipped with hydrocarbons, and other consumables derived from crude oil which will continue to boost demand through 2021.

The oil and gas industry has been at odds with Joe Biden and his Administration since his first policies hampered their development goals. Things got bad this past week when it was revealed Biden’s $2 trillion infrastructure and tax plan proposes to eliminate tax preferences and implicit subsidies for fossil fuels that would boost government receipts by more than $35 billion over the next decade. But things got worse when the financial times reported that methane emissions from the sector have already surpassed pre-pandemic levels while production itself is still roughly 2 million bpd shy of those pre-crisis levels. While this is certainly not the direction the fossil fuel industry wants to be headed, the battle goes on.