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Crude Oil July 06, 2018 02:30:30 AM

Trump is Angry At OPEC Over Oil Prices

OilMonster Author
On Independence Day, Trump resumed his Twitter assault on OPEC and high oil prices.
Trump is Angry At OPEC Over Oil Prices

SEATTLE (Oil Monster): President Trump has tweeted three times that he wants low oil prices, prodding the Organization of the Petroleum Exporting Countries to simply open its spigots and ramp up exports.

At the same time, Trump wants countries around the world to stop buying Iranian crude oil — a key part of his decision to withdraw from the Iran nuclear deal and reimpose sanctions.

The two urges don’t mix, however.

OPEC members in coordination with Russia just reached an agreement to pump an additional 1 million barrels a day onto world markets. Meanwhile, stopping the sale of Iranian oil would take 2.4 million barrels a day off world markets.

Trump believes OPEC can do more by drawing on its spare — or idle — production capacity. But International Energy Agency figures and Saudi Arabian officials have indicated that there isn’t enough spare capacity to offset a complete cutoff of Iranian oil sales. And that realization has helped drive up prices over the past two weeks as countries and traders worry about the security of future supplies.

On Independence Day, Trump resumed his Twitter assault on OPEC and high oil prices. “The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s.” He added, “This must be a two way street. REDUCE PRICING NOW!”

Saudi Arabia, the world’s biggest exporter with the largest amount of spare capacity, has given only a muted response to Trump. It had urged Trump to withdraw from the deal with its rival, Iran. Without specifying a number, the official press agency said the kingdom would do what is necessary to balance oil prices.

Iran, however, has responded with threats. An Iranian Revolutionary Guard commander warned that Iran might blockade the narrow, strategic Strait of Hormuz if Trump stopped oil exports, a move some considered unlikely because Iran’s own imports pass through the strait.

Courtesy: www.washingtonpost.com

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