Posted on 12/18/2014 5:26:45 AM PST by thackney
The head of Mitsui & Co., a big energy investor, said he thinks the U.S. and Saudi Arabia are working together to keep oil prices down in an effort to hurt Islamic State and Russia.
Masami Iijima, chief executive of the Japanese trading company, spoke in an interview as crude oil was trading near its lowest level since May 2009. He said the recent decision by the Saudi-led Organization of the Petroleum Exporting Countries to keep production at current levels, which triggered the oil-price plunge, would particularly hurt Islamic State, the militant group that has seized parts of Iraq and Syria, including some oil fields.
Theyve been selling oil to a certain extent at a discount, and the advantage of that discount has now completely disappeared because inexpensive oil is available elsewhere, he said in an exclusive interview with The Wall Street Journal. It has the effect of cutting off Islamic States source of funds.
Mr. Iijima said of the fall in oil prices: I have a feeling that Saudi Arabia and the U.S. are moving ahead with this as part of substantial mutual discussions.
Representatives of the U.S. and Saudi embassies in Tokyo didnt immediately respond to requests for comment. Saudi officials have said they base their decisions on economics, not politics.
Saudi Arabia and the U.S. are allies in working to stop Islamic States spread, while the U.S. has led the effort to impose sanctions on Russia, a major oil producer, over its aggressive actions in Ukraine.
Growing U.S. energy independence is helping feed Washingtons harder line on Moscow, Mr. Iijima said. The way the U.S. is beating on Russia is amazing, he said. Its no problem for them if they dont get any energy from Russia.
(Excerpt) Read more at wsj.com ...
You are welcome.
No oil was taken out of the global supply chain
The area ISIS took control of reduced oil production from ~300,000 BPD to ~50,000. The global oil supply was reduced by their actions.
If you want to control these oil prices world wide, start working to control the price of FOOD. Might be a whole different ball game.
How would you do that, and why?
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?
No. I don’t think so.
End of story.
What you're not accounting for above is the 100,000+ bpd ISIS was reportedly selling at the discounted price of $25 per barrel.
Of course we also have no idea how much more oil was being sold at $25 a barrel under the guise of ISIS or who was really doing the selling... only that shortly there after the price of oil worldwide plunged toward $25.
That looks very much like the proverbial straw that broke the camel's back for oil pricing.
You will have to show me where they were actually selling that much oil.
But even if true, when the area was producing 300,000 barrels a day before them, and is reduced to 100,000 barrels a day while they are there, the net result to the global oil price is less supply. Less Supply in the market will raise prices if demand is unchanged. Just because some scumbags in Turkey bought oil for $25 from ISIS and then sold it to others at market price, doesn't lower the global price of oil.
From your links:
Meanwhile, as I reported at the beginning of September, ISIS’s oil production and distribution network is not what it was just a few months ago, when up to 70,000 barrels of crude was finding its way onto the black market.
Cohen from the U.S. Treasury suggests — using his revenue number of a million dollars — that production has been reduced to 25,000 barrels and that the Assad regime is still on the receiving end of that ISIS-controlled oil.
http://edition.cnn.com/2014/10/27/business/isis-wealthiest-terror-group-defterios/
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Headlines are often misleading. Into those articles you find:
The $1 million a day figure is coming out of the Iraqi fields of which they have control. Iraq and Syria together could reach up to $3 million a day
http://abcnews.go.com/International/isis-makes-million-day-selling-oil-analysts/story?id=24814359
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The territory ISIS controls in Iraq alone is currently producing anywhere from 25,000 to 40,000 barrels of oil a day, which can fetch a minimum of $1.2 million on the black market, according to Luay al-Khatteeb, a visiting foreign policy fellow at the Brookings Doha Center, who also directs the Iraq Energy Institute. Some estimates have placed the daily income ISIS derives from oil sales at $2 million, though American officials are skeptical it is that high.
http://www.freerepublic.com/perl/post?id=3238501,30
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Three questions please:
Do you believe the oil production went up or down with ISIS?
How does a commodities market react to a reduction of supply?
Do you believe smugglers that risked buying from ISIS passed their savings onto their buyers, or sold at market prices?
Thank you; that would be another plus for the analysis of "stupid" in my previous message.
This administration is far less clever than most of our allies (or at least the allies of the US, if not the administration) seem to think. It doesn't surprise me that Mitsui's CEO would attribute such cleverness to the administration, because Japanese business leadership is quite adept at "clever" and thinking very-long-term, including multi-generation-term, so it would not occur to him that the ones he has been told are the best and the brightest in our country, meaning the Obama administration, could be so incompetent at leadership.
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