'Reduce Pricing Now': Trump's Complicated Relationship with OPEC Countries

09 July, 2018, 06:44 | Author: Corey Lynch
  • US oil touches $75 amid fears Iran will block Middle East shipments

Hossein Kazempour Ardebili, Iran's ambassador to the Organization of the Petroleum Exporting Countries (OPEC), was quoted by media as saying that the world - and specifically American consumers - would eventually consider Trump blameworthy for runaway oil prices in global markets.

Trump tweeted Wednesday pointing fingers at "the OPEC Monopoly" for "driving prices higher".

For the United States, higher oil prices means higher consumer fuel prices in the world's leading economy.

"This must be a two way street", he wrote, adding in block capitals, "REDUCE PRICING NOW!"

Top exporter Saudi Arabia told Opecit raised oil output by nearly 500,000 barrels per day last month, Opecsources said, a sign Riyadh wants to make up for shortages elsewhere and dampen prices.

Following Trump's OPEC complaint, Saudi Arabia, the biggest crude oil exporter, assured Trump they could increase oil production and ensure price stability in the global market, according to Reuters.

On June 30, Trump said Saudi Arabia had pledged to increase its oil output by 2 million barrels per day "to compensate for falling output in Venezuela and Iran".

In his bid to halt the flow of Iranian oil without raising prices, Trump has urged Saudi Arabia and other OPEC members to increase their output.

If you've noticed that the prices at your local gas stations have been going up and down like a yoyo lately, you can blame it on the fickle price of oil.

Output cuts by OPEC and allies since January 2017 have reduced a crude glut. "Looming U.S. sanctions on Iran, however, are causing serious concerns amongst market players".




Trump's latest target are the oil producers that form the Organization of the Petroleum Exporting Countries (OPEC). "Since when did you start ordering OPEC", he said, according to Shana.

"You are hammering on good guys in OPEC", he said.

Brent for September settlement was little changed at $77.78 a barrel on the London-based ICE Futures Europe exchange, and traded at a $6.53 premium to WTI for the same month.

Tehran blames rising prices on United States sanctions imposed on Iran and Venezuela, founding members of the cartel.

"Another major consideration is the extent to which USA shale production will respond to higher prices".

Beginning midnight Washington time on Friday, the USA imposed new tariffs on US$34 billion worth of annual imports from China, to which Beijing responded by saying that it was imposing tariffs on USA goods.

OPEC's production limits, which were implemented and extended multiple times to help bolster prices, have contributed to oil's rise.

US budget analysts generally look at the impact of tax changes over a ten-year period ("Estimated budget effects of the conference agreement for HR 1", Joint Committee on Taxation, Dec. 18, 2017).

Yesterday, the deputy commander of the Sarollah Revolutionary Guards in Tehran warned that any attempt to undermine Iran's oil exports will lead to the closing of the Strait of Hormuz-a narrow waterway vital to oil distribution in the Persian Gulf region.

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