In my perhaps naïve view, the drop in oil prices and subsequent pressure on Russia and ISIS and others is not a planned effort, but a happy side effect of plain old market activity.
(Mainly because I don’t think this administration could pour pee out of a boot with the instructions printed on the heel — nevermind orchestrate an oil price downturn.)
What do you think, thackney? You’re more informed about oil markets than am I.
The reality is that the Saudis despite falling prices are producing whatever amount of oil that is necessary to maintain their income. They have huge ongoing cash requirements as they are subsidizing Egypt and other Sunni clients. Without the Saudi aid, the price of food and other essentials would skyrocket. There would be hunger and political chaos in Egypt. This situation underscores just how precarious “stability” is in the region. The Saudis know that if Egypt devolves, the terror of the “Arab Spring” will sweep them as well.
Mr. Iijima is saying what many US oil company executives are thinking.
As with most foreign policy, there are two possibilities: stupid, and clever.
Stupid: The Obama administration has stated its goal of raising oil prices in general and gasoline prices in particular, as part of its efforts to make Americans suffer European/Japanese-level gasoline prices, and switch over to alternative energy sources, which are not-coincidentally owned by administration cronies and subsidized by tax dollars. All the administration efforts to block the production, refining, and distribution of fossil fuels—not fracking on government land, blocking Keystone XL, destroying the coal industry, etc.—were pointed towards that end. The administration, however, finds itself blindsided by the massive fracking occurring on private lands, the workaround of using trains to carry petroleum instead of pipelines, the continuing sluggish economy, and the unwillingness of other countries to cut back on their own oil production. So the price of oil broke support and dropped precipitously, hurting the very people the administration wants to prop up, meaning of course our adversaries.
Clever: The Obama administration has produced a lot of PR concerning its environmentally-friendly policies, knowing that most of it was (no pun intended) smoke and mirrors. It could block Keystone knowing that the train industry would carry the fuel; it could block fracking on Federal land knowing that private land would pick up the slack; it could destroy the coal industry (the rural poor are not equal to the urban poor, but that is an issue for another time) knowing that the Appalachian population is on the government dole anyway.
The administration has been working behind the scenes to get the Saudis to pump as much oil as they can. In the Middle East struggle, the administration wants two results: Israel diminished, and the Sunnis stronger than the Shi’a. Lower oil prices keeps Israel from exporting its natural gas, and also makes it less likely for Iran to be able to fund Shi’ite-related terrorist groups—an also has the added benefit of pressuring Iran to build its nuclear capability sooner rather than later, which (the administration figures) it will use against Israel but not against us.
One result is to trash the ruble, but that is a minor disturbance, since Putin is not going to give up his power, and the Russian people are used to suffering. Ditto Venezuela—and one reason Obama re-established relations with Cuba is in order to provide the Castro regime another source of funding, since Venezuela will not be able to keep up their oil bargain.
Now, having said all this, I think the “clever” option is fascinating, but I opt for “stupid,” since it is more in line with everything else the administration has attempted to handle in the past six years.
The take away from this story is that ISIS started the current price war by selling stolen Iraqi oil for $25 a barrel.
I sure hope so.
The daily worldwide consumption of oil is about 90 million barrels.
Oil is not going away anytime soon.
Did you think that maybe, just maybe Obama and the Saudi’s are working together to hurt the US Shale Oil business? Hmmmmmmm? Kinda obvious isn’t it?