Speaking to reporters on Tuesday, Vice President Mike Pence said that
the current price of oil remains low enough to allow the US not only to
continue with its sanctions against Iran and Venezuela, but to “bring even more pressure” on the nations going forward.
Though the price of oil is up some off of its lows of 2018, White House
officials were quick to point out it’s still not at the highest prices
it’s been, and clearly the price is informing a lot of US policy.
US Special Envoy Brian Hook reported that Italy, Greece, and Taiwan have all had their waivers to buy oil from Iran revoked, bringing Iranian exports down to 1.1 million barrels per day. The administration’s stated goal is to get Iran’s exports to zero.
Yet getting exports to zero would cause a substantial shortage on the
market, and there is no easy replacement available. This is doubly true
with the US also forbidding Venezuela to sell oil, or at least to get
paid for it.
While this may ultimately cap how high the sanctions can go, the growing
US oil market may suggest that this is informing the administration in
both directions, and that they would not want to ease sanctions if it
means US oil becomes less valuable on the world markets.
How low do oil prices have to fall before US can justify sanctions against Saudi Arabia?
So the way to understand this is as a carefully-controlled throttling of Iran’s exports, so that as they are slowly cut off, production levels from other producers are allowed to rise slowly to offset Iranian reductions in a way that overall supply & prices remain relatively stable, with the strategy ultimately being to continue this until Iranian exports are down to zero?
What kind of Christian wants to bring misery on other people? And why doesn’t the sadistic prick in the sky smite that phony bastard down? And for once I hope oil prices skyrocket.
How lucky is the USA to have such a Christian gentleman in the Administration of peace, justice and human welfare.
How about leaving Iran, Venezuela and all the other oil producing nations alone? Those countries could then sell their production at market
prices. Lower prices would benefit people in countries purchasing oil. Iran, Venezuela and such would be much better off. Being trading partners lessons tensions. Win, win.
But no. The DC political class must have enemies abroad to justify massive wasteful military spending. It also expands their power over the American
people
Venezuela, Iran and such are not enemies. The real enemy is much closer. .
So many things do not add up in the whole energy story. One, US energy bonanza. There is no amalyst up umtil now that can claim that the shale revolution is for real. There is still no profit model. New rigs pay off the loans on previous ones. The oil requires treatment to get it to standard for global rafineries. There is still precious few ways for the gas or oil to get tfrom the source to ports, and even fewer ships that will transport it. Why are we not seeing impact on the domestic market? The sanctions and the creation of shortages, banning some nations from selling their oil serves just one purpose — to force US nominal allies like Europe, Japan, Taiwan, etc. to STOP buying from the “untouchables” and prevent them from signing ing term agreements with undesirabmes, including not building piprlines to undesirable nations. Once the allies are cornered, the pariah states will be forced to either sell their assets voluntarily to US companies, or be taken care of militarily. Once the transfer of oil wealth into US hands occurs, the story of shale scam will cease. Or will continue to be the source of jobs, for as ling as banks will allow debt rollover.
But this is already very clear to everyone. Nobody is buying shale story, nobody is committing to it — ofher then few odd purchases. Thus — Venezuela! Plenty of oil for US to sell to allies. But fears remain. Germany will construct additional capacity to Nord Stream, as it fears US control by far more then fearing Russia.
What is not said — demand is falling in the West, affecting prices. Saudis are now cutting more then agreed, 10% more to be precise. And I suspect cutting will be the order of the day to compensate for the fall in Eurpoean demand. As for shale story — for three years jn a row OUTPUT HAS BEEN DECLINING. With sweet spots being exausted, output is falling in dpite of improved technology to squeeze more out of each drill. Thus feeverish pressure on allies to stick together, until world oul resources are cornered, and all will live happily ever after.
Venezuela is at one a goid and bad target. Good, as there are no networks of pipelines like throughout Eurasia, making it possible to direct oil to different places, and sell. Venezuela is isolated. Bad? It is bad because it is in the middle of a volatile area – Central and South America. Stirring up trouble can resurrect still powerfull anti-American anger, and can make many flimsy pro-American regimes in the area fall quickly. And most likely, military will capitalize on popular anger, as it did in Egypt, making them nearly impervious to political manipulation from the inside. Yes, old tricks like banking stranglehold can be applied, snd food supplies quickly affected. But that was tried in Egypt, Pakistan, Turkey, etc. and is not working. For one, food supplies are now readily available and of better quality, and any new regime would happily wait for such punishment to change suppiers.
Thus, starting chaos in one’s own back yard is always risky. And it is less risky for others to meddle. As for Russia, fireign ministry declared that they lost track of sanctions and stopped counting. Their economy is doing well, their exports growing, number one in the export of non-GMO grains. Just opened a large Mercedes plant outside Moscow to supply Rusdian market. There are two of them already in Russia. Russian large truck maker Kamaz has cut a deal with Mercedes for a joint model under Mercedes label, to be built in Tatarstan. Life just goes on, and precations are made for any future crazy sanctions, such as payment system cutoffs or internet. All sanctions sre doing now is speeding up of alternative methods and technologies. This is not good for US , as we are isilating ourselves from the global scientific and technological developments. We should participate, not take our marbles and go home. Counting on being forever better then anybody else in all spheres of human development — is delusional. And counting on making everyone voluntarily succumb to our might is dangerous.
The best layed plans of mice and men..,
Actually, the US shale and Venezuelan crude industries look to be complementary to each other, which is probably why the US is eyeing regime change to get at Venezuela’s oil. In brief:
– US shale operations produce “tight oil,” a “light sweet” crude, but the method is expensive.
– Venezuela’s oil is a “heavy sour” crude with high sulphur content that has to be mixed with light sweet for refinement into finished petroleum products.
The US shale industry wants Venezuelan “heavy sour” to mix with its “light sweet” at US refineries. They want it cheap, and they want their refineries, not Venezuela’s ports, to be the export profit center. And whatever the US oil industry wants, the US government wants.