The OPEC Problem
"Shortsighted."
That, in a word, is what the Biden White House thought of OPEC+'s move to cut oil output by two million barrels per day. The decision, which was in the market (and at least partially in the price) prior to the official announcement, was viewed in Washington as the second slight in as many months.
On September 5, the alliance announced symbolic curbs for October, negating a token supply increase delivered under pressure from US officials keen to arrest rising gas prices in a pol
The US could decide that Saudi’s increasing and active political closeness to Russia requires a review of military technology sales, mil-intel links, and security relationships. Hold up pending weapons deliveries, including spares and supplies. Pull back approved sales for re-review. Cut back assistance in operations, maintenance, etc. The Houthis might take the hint. I don’t think the US would need to pull very hard on the Saudi security blanket to make MBS, or his father, quite worried.
Domestic voters would like that (no-one likes the Saudis) and gives Biden a blame finger to point.
Just stop draining the SPR. That is ridiculous. The SPR has been reduced by 50%, it is now lower than commercial storage, commercial + SPR combined are seriously low.
Draining the SPR was a brilliant move. Not just for the damper it put on prices already but for the commitment it makes to oil producers. The eventual refill promises to make the US a buyer of last resort if the global economy does fall off a cliff.
With friends like MBS, who needs…well, you know the rest.
Maybe initially the US did not want to use up its own oil but would rather deplete mid eastern oil. However, with the move away from fossil fuels it seems likely the US will end up with billions of gallons of oil in the ground that will be worthless. It is very frustrating that we let the Saudis’ jerk us around when we have more than enough oil to see us through. It is even more irritating when you see the Russians pulling their strings.
A nuclear deal with Iran is also a possibility. That would unleash some supply. The Saudis better be careful- they could get burned by geopolitics as well as benefitting from it.
Iran is the enemy of Saudi Arabia and several other MidEast countries (proxy war in Yemen). Some of these countries are more “moderate” than others. And we can agree that “moderate” is a very relative term in the geopolitics of the Middle East. By our flirting with the mullahs in Iran (who are currently facing a rebellion of young ladies in high-school)…..perhaps it shouldn’t be a surprise that countries that have a history of partnering with US for decades, and are enemies of Iran …aren’t feeling too sympathetic.
What is trully sad is that because of our broken poltical system we can’t establish a long term energy policy. If we did what the UK does and subsidize solar panels for businesses and homes, as well as heat pumps 100% we could be on our way to true energy independence. There is also Solar thermal which could be put in deserts and other arid unoccupied land. We currently have 93 operational nuclear plants, if our country built another 100 across the country then we could meet 80% of our nations energy needs so we couldn’t get rid of all the natural gas electric plants but we could get rid of a significant portion of them.
The US makes about as much oil as it consumes. US production is currently near all time highs, and should achieve new all time highs in 2023.
2017: 3,415,257,000 Barrels of Crude Oil
2018: 3,993,288,000 Barrels of Crude Oil
2019: 4,485,635,000 Barrels of Crude Oil
2020: 4,129,563,000 Barrels of Crude Oil
2021: 4,082,478,000 Barrels of Crude Oil
U.S. crude oil production in our forecast averages 11.8 million barrels per day (b/d) in 2022 and 12.6 million b/d in 2023, which would set a record for the most U.S. crude oil production during a year. The current record is 12.3 million b/d, set in 2019.
https://www.eia.gov/outlooks/steo/report/us_oil.php