Oil price rises on Biden Iran oil strike comments
Oil price rises on Biden Iran oil strike comments
Any extended rise raises the possibility of higher petrol prices and gas and electricity bills.
The price of oil has jumped 5% after US President Joe Biden said the US was discussing possible strikes by Israel on Iran’s oil industry.
Asked on a visit if he would support Israel striking Iran’s oil facilities, Biden said: “We’re discussing that”, according to Bloomberg.
I'm currently looking at two Wall Street Journal articles on Kagi's news results. One is from yesterday, and has Saudi Arabia warning of a price collapse to $50/barrel oil. The other is from today and asking whether oil is about to skyrocket to $100/barrel.
I guess that pretty much covers all the bases...
If all other things stay the same and SA starts punishing OPEC with production bumps, then yes 50 to 60/bbl is possible in the current balanced market. But these geopolitical risks are unpredictable and military action removing more production than SA could offset with it's spare capacity would quickly drive it back to 100/bbl.
SA wants OPEC members to believe the 50/bbl threat because OPEC/OPEC+ as a whole have done nothing but overproduce and ignore quotas for years and years, bolstering their own profits while SA tries to take up the slack by cutting. SA is sick and tired of being taken advantage of by their "friends" in the cartel (truely a Leopards Eating Faces moment). Opec members will be more likely to comply with quota demands if there is an imminent market crash.
The US would want members to believe the 100/bbl war premium threat as that will keep reserves high and production on the market, as sellers will want to take immediate advantage of a spot market price spike, which in itself dulls the ultimate effect of said spike and prevents physical shortages that would be severely damaging to the US/OECD countries.
Frankly the entire thing is a giant "¯\_(ツ)_/¯" so make sure your gas tank stays full and we'll wait and see.
Fixed headline: "Price Gougers in an industry famous for Price Gouging and collaborative price-fixing seizes opportunity to Price Gouge and blame someone else"
That's a little wordy though...
People keep telling Biden not to lean on the Oval Office gas price lever, but he does insist.
We apparently just started refilling the Strategic Petroleum Reserve.
WASHINGTON, Sept 30 (Reuters) - The U.S. has bought 6 million barrels of oil for the Strategic Petroleum Reserve for delivery through May 2025, the Department of Energy said on Monday.
The purchases are part of an effort to replenish stockpiles after President Joe Biden ordered the largest ever sale from the reserve in 2022 of 180 million barrels in an effort to control fuel prices following Russia's invasion of Ukraine.
With that i also read, that the gulf states are concerned, that Iran might target their Oil production and close off the street of Hormus if the US attacks Iran.
https://www.middleeasteye.net/news/lebanese-army-fires-israel-hezbollah-strikes-invading
“Our response will be solely directed at the aggressor. Should any country render assistance to the aggressor, it shall likewise be deemed an accomplice and a legitimate target," Iran's mission said.
Concerned Gulf Arab officials told their Iranian counterparts they would remain neutral in the conflict between Iran and Israel, as they look to prevent spillover into their territories.
Reuters reported that ministers from Gulf Arab states delivered the message to Iran at a meeting of Asian nations hosted by Qatar, worried about potential Iranian attacks on their oil facilities.
"The Gulf states think it's unlikely that Iran will strike their oil facilities, but the Iranians are dropping hints they might from unofficial sources. It's a tool the Iranians have against the US and the global economy," Ali Shihabi, a Saudi commentator close to the royal court, told Reuters.
I think this would be a gigantic strategic mistake to provoke by the US administration. If the oil price hikes and the US gets dragged into a great war in West Asia it will throttle the American economy and probably kill all prospects of the Dems winning in November. Meanwhile Putin will roll in money, stabilizing his economy on the one hand, and making use of the shifted US focus and arms prioritization, effectively sacrificing Ukraine to him.
Price gougers gonna price gouge
Well that's bound to happen with or without his comment.
But not using long range US weapons... Right?!
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