Category Archives: Global Oil Market

Answer to Ahmadinejad’s question over dinner: “To block your control of oil, like with Saddam.”

Pictures taken by the author (T.W.O’D) during a dinner and Q&A with President Ahmadinejad, in NYC during 2010 UN General Assembly opening. Note quote from Ahmadinejad.

Some years ago, I was invited to dinner with President Ahmadinejad in NYC during the annual opening of the General Assembly.

The American think-tanks, consultancies, and x-diplomats present went on and on asking detailed questions about this or that scenario where US experts might work with Iranian experts to observe or limit the Iranian nuclear enrichment program. (I mentioned this 2010 dinner in a later post: “China’s Iran-Oil Import Angst. Part I” Feb 13, 2012.)

It became rather tiresome. Ahmadinejad clearly was growing tired of it. He then asked us,

“If this is all about our nuclear program, then I would like someone please to address here why did the United States side with Saddam Hussein and attack us before there was any issue of a nuclear program?” (Iranian President M. Ahmadinejad, 22 Sept 10, NYC, my notes, T.O’D.)

Everyone ignored his question, and simply kept up with their obviously pre-prepared technical questions. But, what had he meant?

To me, clearly he was referring to the Iran-Iraq war (Sept.1980-Aug.1988), when the USA, at a certain point, decided to take Iraq’s side and, among other things, sunk the entire Iranian Navy in a day, took over air traffic control for the Iraqi air force, started directly advising Iraq on strategy, and etc.

In the end, Iran had to accept an Iraqi peace deal after a crushing defeat facilitated by the USA. I recall now all these details vividly. And, all this was indeed well before any nuclear program.

Aside: I find it disturbing that so many “experts” refer to the supposed “Iraqi defeat” in that war. This was all understood at the time. For example, I quote here from the NYT, (Sec. A, Page 1, of July 21, 1988): Ayatollah Khomeini had personally endorsed the cease-fire demanded by United Nations Security Council Resolution 598. Iran’s supreme religious leader confirmed, for the first time, that he had approved the resolution and added, with his characteristic rhetorical flair: ”Taking this decision was more deadly than taking poison. I submitted myself to God’s will and drank this drink for his satisfaction.” (Emphasis added to the most famous part of Khomeni’s statement. T.O’D.) Further research will quickly show he had to sign as Iran was being soundly defeated at the time, hence the “poison” he had to swallow. 

By the way, it is also known, at least in academic circles, from later extensive archival research, that the war with Iraq was planned and instigated by Iran, and that Iraq had attacked in response to Iranian provocations and signs of Tehran’s preparations, after warnings. I am happy to send references to those interested.

What I myself had been arguing, back then, during the Iran-Iraq War Ahmadinejad was referring to, was that the US-Iran confrontation was actually about the US opposition to any country, either from inside the Gulf Region or outside the Region, gaining hegemony over the Gulf and the Straits of Hormuz. This had to do with guaranteeing the free flow of oil, and that the global oil market would be a “real” market that no one state could unduly control. I had even coined a term, “The Global Barrel,” for this market-centered, post-OPEC-nationalizations collective oil-security system, a system initiated by Henry Kissinger in 1973.

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USA sees Gulf energy flow as core interest. If no deal soon, Marines will take Hormuz. | My Asharq TV

Guaranteeing Gulf energy flows to allies has always been a core US interest, while today’s Great Power Competition means China’s access will be rendered conditional.

This is not the Iraq war. If after operations to secure the coasts and islands and to clear mines, the Iranian regime resists, the USA plan is that Iran’s oil sector and economy would be destroyed by aerial bombardment. Washington neither desires nor needs to occupy Iran proper nor to change the regime. The US strategic imperative here is to secure, long term energy flows from the Region and, accordingly, to end the regime’s capacities to project regional power.

After almost 30 years of analysis and my university seminars, there is very little I see new here, save a new USA urgency.

In my view, this urgency flows from USA concerns over Great Power Competition, especially with China. This is exacerbated by the possibility that Iran could close the Strait in solidarity with China (or perhaps Russia) during any Great Power conflict elsewhere. The threat of Iran’s developing capacities in this regard, especially its missiles and drones, but also its nuclear weapons ambitions and intentions to rebuild its regional proxy allies, all act to undermine the prerogatives of the USA and its Gulf regional allies to secure the region and its energy flows.

In any case, the idea that Washington and Trump “have no strategy” is demonstratively wrong, and self-disarming. (See, for example, my EIES study of Trump administration energy policy since ca. April 2025 v. Russian oil.) One might not fully understand the strategy, or might disagree with it, but there is clearly a multifaceted strategy here under the general slogan of “USA Energy Dominance” (e.g., see posts here and here). Besides Iran, it especially includes Russia, Venezuela, India, and of course China, as well as US domestic oil, gas, nuclear and renewables policies.

Author’s screen shot from NTD News. The statement was posted on Tuesday.

Note, a third Amphibious Assault Group, an aircraft carrier with an additional Marine Expeditionary Unit of 2000-2500 troops, has just arrived to join two other already in the Region. This further shows that Trump is increasing preparations to seize Hormuz, not backing down.

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Trump’s Iran Talks & Oil Supply: Experts Rühl, Kemp & I Analyze

To watch at Bloomberg, click this URL

Both Christof Rühl (bio) and Jack Kemp (bio) had great, data-driven media this past week. I too addressed these issues (spoiler: I assess Trump is not bluffing on Iran talks, and oil supply remains adequate.) My conflict-trajectory take differs a bit from Chrisof, perhaps closer to Jack K here.. My Al Jazeera was just after Trump announced talks.

Jack Kemp with facts on oil supply vs. information one finds in the media.

“The Political Economy of Oil in the US-Iran Crisis,” T.W. O’Donnell, 2009. (Situating “US Energy Dominance”)

Dear readers, This paper, which I wrote in 2008-09, analyzed the evolution of interests underlying the US-Iran crisis till then, interests which persist in the 2026 US-Iran war.

That is, Trump’s “USA Energy Dominance” strategy does not seek to fundamentally alter the structure or logic of the post-1973 global, market-centered, USA-led-and-protected oil order. However, to preserve it, the USA now feels the necessity of removing the Iranian mullahs as custodians of Iran’s oil for persistently insisting on projecting power and seeking hegemony in the energy-critical Gulf Region.

What is new from 2008, is the bipartisan urgency felt in Washington to renovate the existing oil market-and-security order, reconsolidating the USA as primary arbiter of energy flows via Hormuz to both China and US allied and friendly states of the Indo-Pacific region. In addition, to be capable of significantly blocking Russian oil exports and thereby its petrostate-fueled aggression elsewhere.

In particular, it mush achieve these aims, vis-a-vis Russia and China, without causing global oil shocks. (continued in full-column below …)

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TRT Roundtable: With Hormuz, the US will control half of China’s oil flow, secure Asian allies’ imports. Washington is taking Xi’s “by 2027” threat seriously.

My comments on the show.
Full show

Mar 12, 2026. Is the Iran war about the US containing China? For my part, I explained how control of Hormuz would give the US two key levers:

  1. The USA will control half of China’s oil imports, 5.4 million barrels per day (mbd), which flow through Hormuz.
  2. The USA will insure that during any Pacific war China might start that Iran, acting in solidarity with China, could not block oil flows to US Asian allies such as Japan, S. Korea, Australia, Philippines, or flows to others whose supplies it would also want to guarantee, such as Viet Nam, Indonesia, Malaysia, Singapore, etc..
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I agreed with IEA’s Fatih Birol and DoE’s Chris Wright: There’s plenty of oil now. So, G7 tapping the SPR’s is “premature”. — Indeed, the US soon dropped the idea! [on TRT, London]

I was a bit insistent that the spike during the day today, to over $100 at some point, was overblown.

As I mentioned, Fatih Birol at IEA (I forgot to mention also Chris Wright, USA Secretary of Energy),who had said the same thing, insisting last Friday that there is plenty of oil in the market. (See Wright and Bloomberg’s Steven Stapczynski elaborate here). That is NOT a problem now.

And, in the interview, I detailed some facts about this (e.g., before the war started nine days ago, there were about 1.4 billion(!) barrels floating on the water, an unprecedented amount, and the Russians had nowhere to put their unsellable oil).

So, It turns out that late Monday evening news (EST USA time), the news coming from the USA vindicates my suspicions. For now, there is no plan by the administration to release SPR reserves into the market.

Notice what I explained about this likely being a short-lived boost for Russian oil That is, after the Venezuelan campaign, if the Trump admin. Iran campaign works, both China and Russia will be in a very restricted position in the now-USA tightly controlled international oil market supply chain.

Here is the WSJ saying the prices of oil dropped quite a bit, and the stock market rebounded as well by the end of the day. Following that is a Bloomberg take too.

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With Iran & Hormuz, the US would act as arbiter of China’s Gulf oil & LNG access, while ensuring access for Indo-Asian allies. Venezuelan oil growth will enable Trump to impose phased cuts of Russian exports, after the Iran war. [Kanal24, Kyiv]

This is a longish, ca. 30 minute video. Host Nataly Lutsenko kindly told me she wanted to make a long interview.

(During time of crisis like this, I have so many TV and press interviews that I don’t have time to put most of them online. So, I will refrain from writing long posts to accompany videos to get more online, if I think they are useful interviews. – Tom O’D)

My TRT London: “US Energy Dominance” & global glut give Trump historic leeway to hit Iran without an oil crisis.

Last night on TRT World Global News (London), I emphasized that despite the modest spike in oil prices from about $70 to $78 per barrel as of yesterday, Trump has an historically unprecedented advantage for exercising “US Energy Dominance.”

Fig. 1. IEA projects global oil glut throughout 202

The campaigns against Venezuela and Iran, plus the turning of the Indian oil-consuming behemoth towards USA and Western interests vs Russian oil, are examples of the geopolitical leverage the USA’s now-dominant role in global oil affairs has afforded the Trump administration.

This oil-market advantage comes mainly from of two things:

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My EIES Study: ‘Liquidating the Russian Petrostate.’ New USA-Ukrainian oil-war effective. Siberian fields threatened.

A new USA-Ukrainian strategy has replaced the failed Russian oil-price cap. Oil is the material basis of Moscow’s capacity not only to fight Ukraine, but for its subversion in former USSR states, in Africa, Latin America and elsewhere. In the US, one finds strong bipartisan sentiment that “Russia is a gas station, masquerading as a state,” as former-Senator John McCain famously remarked, and that Moscow must be deprived of its easy petrosate riches.

My study for European Initiative for Energy Security (EIES, based in Brussels, is associated with SAFE in Washington, DC, though policy-independent), traces the new USA-Ukrainian joint war on Russian oil, which includes sanctions, tariffs; drone strikes on Russian refineries, ports and oil tankers, and seizures of shadow fleet ships at sea. All these are part of a coherent campaign begun in Spring 2025, as the Trump administration realized that its focus on offering Putin economic enticements to end the war was proving ineffective. It became clear that the application of “pain”, as Trump put it, would be necessary.

The present study shows, in some technical detail, how it is possible to, first, physically stop the majority of Russian seaborn oil exports, secondly, that this can force the shutdown of old, delicate W. Siberian oil fields in winter resulting in the permanent or semi-permanent ruin of these fields, the material basis of the Russian petrostate economy.

This, in fact, is the real threat, the “pain”, which Putin has begun to fear, inducing him to engage for the first time a bit more seriously in negotiations.

The Report also draws attention to and analyses the unfortunate incapacity of many European expert observers and think tanks to see the outlines of this coherent oil war strategy, distracted by the considerable bluster and threats employed by President Trump.

Third, in parallel, the study explains presently favorable oil market conditions consisting of a persistent supply glut, making any major cutoff of Russian seaborne oil exports feasible without sparking a lasting spike in world prices. I show how the OPEC-Gulf states, especially the Saudis and UAE, have facilitated this glut in coordination with President Trump et al, with the prospect of regaining much of the Indian and Chinese market discounted Russian oil has taken since 2022.

For the longer term, however, in the conclusion to this report, it is shown how the return of Venezuelan barrels to the market (and perhaps Iranian barrels as well) are part of a comprehensive USA energy strategy to create market conditions enabling both persistent low prices and, if necessary, the permanent “Liquidation of the Russian Petrostate,” to end the Ukraine war and Moscow’s international significance-in-general.

This is all seen to be part-and-parcel of the Trump administrations detailed commitment – with significant bipartisan support – to exercise “USA Energy Dominance” as a pillar of USA geo-economic power and geostrategy.

I am available for interviews and speaking on this Report’s topic. Contact EIES or me directly.

My Al Jazeera| In Venezuela, an oil “security guarantee” means Trump-Rubio get armed Chavismo to disband or stand down.

My Al Jazeera (EN) interview, Interview recorded

I spoke about three issues

-1- How US and other foreign oil firms can start immediately to stepwise developing three different types of oil fields. Yes, Venezuela can become a “powerhouse” oil producer. This could be a huge change in the global oil system.

-2- What is meant when Trump and oil firms talk about USA “security guarantees” for work in Venezuela. The USA government is unlikely to subsidize oil majors going into Venezuela. Instead, they are talking about somehow Washington managing a “regime change.” The KEY element of this is that the present pro-Chavista armed actors, both the state and non-state armed actors and the Chavista-state intelligence services, all of which are widespread in the country, are still intact and are still active, either agree to disband stepwise or to stepdown and not oppose the formation, eventually, of a new government elected freely. The instruments of state armed coercion that will remain, including elements of the police, intelligence services, national guard, army, must agree to serve whomsoever is democratically elected in future elections. However, as Trump himself points out, the foreign oil majors “are tough guys” and they have abundant experience and methods to work in countries having fairly dangerous situations.

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Kyiv TV| Venezuela can replace Russian oil.

My Kanal24 interview with Nataly Lutsenko, who was in Kyiv, Ukraine on11Jan25, posted here 18Jan.. I explained:

— The stepwise manner in which different Venezuelan oil basins can start being brought to market rapidly while recovery and new production can proceed to more complex and higher-investment projects over time.

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My Newsweek| I counter Exxon CEO Darren Wood’s WH drama that “Venezuela is uninvestable.” And more commentary.

Oil Bosses Hit Trump With Venezuela Setback: ‘Uninvestable’

Image from 2002 shows an oil refinery in Maracaibo, Vzla. Photo ANDREW ALVAREZ

Published Jan 10, 2026 – By, Brendan Cole, Senior News Reporter

Developing Venezuela’s oil industry  following the removal of its leader, Nicolas Maduro,  would require major legal and commercial changes, Exxon CEO Darren Woods has told President Donald Trump

Woods gave a downbeat assessment of the viability of restoring oil production in the South American country believed to hold the world’s largest reserves, telling Trump that at the moment, the country’s industry was “uninvestable.”

Energy industry analyst, Thomas O’Donnell, told Newsweek on Saturday that one approach would be for companies to work on small projects to kickstart production before targeting the oil fields that require heavy investment.   

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Oil Bosses Hit Trump With Venezuela Setback: ‘Uninvestable’

Image from 2002 shows an oil refinery in Maracaibo, Vzla. Photo ANDREW ALVAREZ

Published Jan 10, 2026 – By, Brendan Cole, Senior News Reporter

Developing Venezuela’s oil industry  following the removal of its leader, Nicolas Maduro,  would require major legal and commercial changes, Exxon CEO Darren Woods has told President Donald Trump

Woods gave a downbeat assessment of the viability of restoring oil production in the South American country believed to hold the world’s largest reserves, telling Trump that at the moment, the country’s industry was “uninvestable.”

Energy industry analyst, Thomas O’Donnell, told Newsweek on Saturday that one approach would be for companies to work on small projects to kickstart production before targeting the oil fields that require heavy investment.   

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My Al Jazeera| Venezuela: China’s $100b oil-debt conundrum & Trump| With Janiv Shah, VP Rystad

7 January 2026, Al Jazeera English. On Venezuelan oil, and Trump’s new leverage over China’s oil-loans..

See especially (i) my second response re. China’s big risk regarding repayment of its $100b loans, collateralized with a promised flow of Venezuelan oil, and equally (ii) Janiv Shah’s first comment, on the more immediate China impact. It was a pleasure to be on with the well known oil expert Janiv Shah, VP RystadEnergy.

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My bTV| On the Trump administration’s Venezuela logic: drugs, migration & oil (partly vs Russia). Both Maduro’s regime & Machado’s opposition sit & wait.

I was interviewed by David Karalvanov at bTV (Bulgaria) on the US-Venezuela confrontation under Trump and Maduro (01Dec). David used excerpts for a documentary and kindly gave me the full video here. An outline of the five questions and answers is below here.

Three Asides:

  1. I recall vividly how Trump and co., in his first term, easily misled a naively dependent Venezuelan opposition into believing that the USA was planning to forcibly remove Maduro. In turn, the opposition convinced the country’s population that the USA was preparing to forcibly liberate them. This belief was deeply corrosive to advancing any self-reliant domestic anti-Maduro pro-democracy movement. In the end, the Trump administration tried a poorly prepared putsch. John Bolton, Trump’s then-National Security Advisor, the organizer, was embarrassingly gamed by the Venezuelan regime’s intelligence police. Meanwhile, the present Venezuelan opposition has long been unwilling to organize or endorse any popular movement to forcibly restore democracy from below.
  2. In a recent CNN interview I spoke about Trump rationales for the present confrontation. See: “Why Trump wants a Venezuelan oil boom …“) and dangers of not preparing for the day-after possibilities of chaotic events, terrorism or resistance by armed pro-Chavista military or collectivo groups, and/or x-Colombian guerilla groups long active in the country.
  3. I’ve written for 20 years on Venezuela, Chavismo and oil, including two years as visiting professor, Universidad Central de Venezuela’s UCV/CENDES, Caracas.–I’m happy to speak or consult on Ven.-US-China-Russia-Iran-Colombian-EU-… and/or Ven. domestic matters in English or Spanish.- Tom O’D

David’s five questions and some of my answers:

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My Kanal24 Kyiv | Oil War: Ukraine-US escalation could ruin W. Siberian fields. As Putin nixes peace deal, Trump faces a decision.

To watch at Kanal24 site here

Nataly Lutsenko at Kanal24 TV in Kyiv, invited me again to an interview. We discussed, in detail, what I see as “the oil war” jointly waged by Ukraine and the USA against Russia. Each has its role:

(i) Ukraine is waging an air campaign with drones and missiles against Russian refineries, oil export terminal ports, and oil tankers. This is an audacious and expanding campaign seriously impeding Russian capacity to handle export of the oil its fields produce.

It is important to note, politically, that these attacks are assisted by USA intelligence, as reported in October by the FT. Ukraine’s intelligence chief also spoke of Ukraine’s crucial dependence on US intelligence assets on 20 December, and later on the depth. Unlike the former “oil price cap” strategy of the Biden administration and the early months of the second-Trump administration, the present, much expanded air war on Russian oil is now clearly embraced by the USA.

(ii) For its part, the USA’s role in this oil-war – along with NATO, UK, EU and G7 allies – involves increasingly harsh tariffs and sanctions against Russian oil exports.

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