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- My Asharq: Russian oil to India, 40% of imports, ousting traditional suppliers. Borell wanted resale into EU stopped. OPEC: Investments must surge before Q3/Q4 Asian demand-&-price rise. 14.May.2022
- My Asharq with Saudi expert: MENA green hydrogen exports will be inefficient & counter-productive for climate. Renewables still almost “nonexistent”, nuclear is pragmatic. 14.Apr.2022
- My Sky News: Germany-Mauritania green hydrogen plan is complex, costly & slow. Not mentioned: Mauritania & Senegal to soon export LNG. 14.Apr.2022
- EU/G7’s Russian diesel price cap is on. Now, as prices rise, Ukraine’s allies can squeeze Putin’s revenues, short of a price spike. Putin’s no longer decides his business terms. 14.Feb.2022
- My Asharq: EU & G7 debate Russian oil-products’ caps. Two-caps needed by 5 February. High impact likely later this year. 14.Jan.2022
- My Kyiv Post | Opinion Exclusive: “Reflections on Scholz’s Leopards’ Stalling Strategy” 14.Jan.2022
- My Asharq: Will Iraq be able to supply Germany natural gas? Not likely soon: Iraq has risky 40 % reliance on Iran gas, just like Germany’s was on Russia. Also, Iraq announced the same contract to capture flared gas 3X in six years, with little progress. 14.Jan.2022
- My Al Jazeera | Germany takes first USA LNG | Putin suffers Winter setback in energy war vs EU, likely lasting to 2026-27 | This is a 2nd front of Russia’s failing Ukraine War. 14.Jan.2022
- My DW live: Russia ban on oil sales to price-cap nations has no significant effect. Russia will be selling less oil over time & sanctions complicate shipping insurance. Meanwhile, Ukraine-allies’ price cap encourages India & China to demand lower prices from Russia without officially joining cap. 14.Dec.2022
- My Al Jazeera: Putin’s decree banning oil sales under the cap is “a bit of bravado.” – The EU/USA can squeeze Russia by “stepwise lowering the cap” & “bringing other, new oil online.” 14.Dec.2022
- Roundtable, London asked us: “Is the US making a profit from the conflict in Ukraine?” — In my view, this complaint reflects Scholz & Macron’s continued longing to escape the USA’s transatlantic strategy towards Russia & China. 14.Dec.2022
- My Aljazeera [English] Today’s start: EU sanctions Russian imports & G7-EU price-cap. As USA planned: no market shock. 14.Dec.2022
- EU sets $60 Russian-oil-price cap. What now? [My Al Jazeera & Asharq (Blmbrg) interviews] 14.Dec.2022
- My Al Jazeera: EU debates where to set Russian oil price cap. Over time this price “will be lowered as [new oil] comes online,” shrinking Russia’s market. “The Americans just don’t want a shock removal.” 14.Nov.2022
- My Polish press interview: “Europe can replace Russian oil & gas by 2027” but “in war there are casualties” (Pl. & Eng.) 14.Nov.2022
- My Doha talk: Europe’s energy crisis: another front of Putin’s Ukraine War – & the GCC 14.Nov.2022
- My DW: Will the gas-price cap keep firms in Germany? BASF & German politicians’ years-long energy policies have collapsed. 14.Nov.2022
- Our TRT/Istanbul: Will Turkey be Russia’s new gas hub to Europe? Can Putin save his gas sector? What’s Erdogan’s game? 14.Oct.2022
- Our TRT London: Can Moldova escape Russian energy dependence? 14.Oct.2022
- My Al Jazeera: Costa, Sánchez & Scholz, in Berlin, demand Midcat gas pipe via France. They’ll confront Macron at EU Council, 20-21 Oct 14.Oct.2022
- Al Ghad/Cairo: Putin tempts Erdogan, “Take Nord Stream gas at a Turkish hub. Sell EU my gas. Forget NATO.” Putin’s ‘Gas Godfather’ games become pathetic. 14.Oct.2022
- Video | European Energy Crisis panel at Montenegro’s 2BS Forum, with Prof Alan Riley, me & moderator Jasmina Kos 14.Oct.2022
- Kyiv Post: “What to Expect in the Energy War? Interview with Expert Thomas O’Donnell” 14.Oct.2022
- My Al Jazeera: Washington picked a pointless, populist fight with the Saudis over OPEC+ cuts 14.Oct.2022
- Asharq TV: I debated Moscow expert Kirill Semyonov on the Nord Stream 1 & 2 explosions: “A suspect (Russia) cannot be an investigator.” 14.Oct.2022
- My Sky News: Are EU Measures vs the Russian Oil- & Gas-War Enough? 14.Oct.2022
- Financial Times quotes me: Germany embraced Russia’s energy for “strategic balancing” vs USA 14.Oct.2022
- My TVP, Warsaw: Assessing Energy Supplies in the EU’s Energy Crisis vs Russia. 14.Sep.2022
- My Al Jazeera: I was asked to assess Pres. Von der Leyen’s proposals on the energy crisis | Sharing hardships fairly is the key to unity. 14.Sep.2022
- Al Jazeera’s video on my view: “What does Russia’s gas cut mean for Europe?” 14.Sep.2022
- I’m cited The New York Times | Putin is wielding his gas weapon vs the EU while he still has it. The energy war will be fierce. 14.Sep.2022
- My Asharq: Russia’s War is driving MENA shortages, inflation & unrest | How Moscow uses “denazification”+”food aid” lies. What can MENA states do? 14.Sep.2022
- My DW: On OPEC+ decision & the EU’s Russian-gas price cap || AL JAZEERA: I debated Moscow expert on Putin’s try to divide EU on gas. Gemany will never trust Russian energy again; & it is rearming. 14.Sep.2022
- On Al Jazeera with expert in Moscow | Putin wants a “compromise” for gas. Like what, Donbas? Odessa?- In my view, EU citizens will choose the cold … & their dignity. 14.Aug.2022
- My Al Jazeera: Russia cuts Latvian gas; but Baltics & Poland prepared, with LNG facilities. German leadership ridiculed them. | Putin is using energy blackmail to fight sanctions imposed on Russia for his Ukraine war. 14.Jul.2022
- My DW TV: Why Putin cuts EU gas bit-by-bit? Can Germany handle it? Wind’s low, so we’re buring gas! | Many EU states warned Berlin: “Don’t open our door to Putin’s Trojan horse!” 14.Jul.2022
- Putin cuts Nord Stream1 to 20%. Gas is Moscow’s key economic lever: Exports earn much less than oil & EU needs two-to-four years to replace it | USA-EU should hit Russian oil harder 14.Jul.2022
- Roundtable Invite/Einladung: Threat of Russia-Gulf States oil price war for Asian market? Berlin, Bundestag Press House, 28 July. [Deutsch/English event] 14.Jul.2022
- My Euronews: Nord Stream1 back on. Putin knows EU will be free of Russian gas in couple years; he’ll weaponize it while he still can. Killing EU-Ukraine solidarity is the target. 14.Jul.2022
- Is a lack of oil refineries boosting global fuel prices? Al Jazeera asked us, in Houston & Berlin 14.Jul.2022
- Al Jazeera asks: What if Gazprom cuts Nord Stream1? EU strategy rests on solidarity. | As Putin’s EU gas trade dies, he can weaponize it once or twice more. 14.Jul.2022
- Al Jazeera: Former Russian Foreign Minster A. Fedorov & I are interviewed: A Putin Gas War vs EU? | Me: This would be another huge Putin tactical blunder. EU citizens will not be intimidated, will unite, blaming Putin. 14.Jul.2022
- My Al Jazeera. Turbine-in-Canada: Germany gets it back for Russia. Ukraine objects | EU gas crisis looms: Winning this economic war will have costs 14.Jul.2022
- My Asharq(Bloomberg): What if Russia cuts off EU gas? Do sanctions hurt Russia? How’s Putin’s oil going to India? “This is Putin’s energy war to win his Ukraine war.” 14.Jul.2022
- My AlJazeera: Russia cuts exports via Nord Stream 1 by 60%, further weaponizing EU over-dependence, as part of its war against Ukraine. EU winter gas rationing is possible. 14.Jun.2022
- My DW live: Gazprom Germania bailout: German policy made EU hostage to Russian energy, enabled Moscow’s Ukraine war | German strategy 1980-2022 was “strategic balancing” of Russia vs USA to carve out a space for its freedom of action within sphere of USA predominance. 14.Jun.2022
- My Al Jazeera: After EU (finally!) puts sanctions, the Saudis & OPEC move quickly to occupy Russia’s lost market shares | The world has abundant oil to develop [EN audio/AR video] 14.Jun.2022
- AlJazeera live: EU failes to agree on Russian oil embargo. With months of oil in storage, Druzhba inland refineries are no excuse. 14.May.2022
- Asharq live: No EU embargo agreed vs. Russian oil. Some too cautious (Germany), others pro-Putin (Hungary). Yet, EU has months of oil in storage. [EN audio, AR video] 14.May.2022
- My Al Jazeera: Finland, the Baltics & Poland prepared well for Gazprom’s cutoff. Germany & Austria did the opposite, putting EU at risk. 14.May.2022
Category Archives: Global Oil Market
EU/G7’s Russian diesel price cap is on. Now, as prices rise, Ukraine’s allies can squeeze Putin’s revenues, short of a price spike. Putin’s no longer decides his business terms.
Posted in Euroepen Union, Global Oil Market, Russia, Sanctions
Tagged Energy, Russia, Ukraine, United States
My Aljazeera [English] Today’s start: EU sanctions Russian imports & G7-EU price-cap. As USA planned: no market shock.
FIRST: Here’s my AM Al Jazeera-ENGLISH), today 05Dec22. [About 30s. at start is lost]
SECOND: Here is my ENGLISH AUDIO of my AM AL Jazeera-Arabic interview
Posted in Euroepen Union, Global Oil Market, Oil Crisis, oil price war, Oil prices, Russia, Uncategorized
Tagged al jazeera, oil price, oil price cap, russian sanctions
AlJazeera live: EU failes to agree on Russian oil embargo. With months of oil in storage, Druzhba inland refineries are no excuse.
You comments and critiques rae much appreciated. Tom O’D.
Posted in AlJazeera, European Union, Germany, Global Oil Market, Interview, Russia, Sanctions, Ukraine, Uncategorized
Tagged al jazeera, Energy, European Union, geopolitics, Interview, oil sanctions, oil sector, Russia, Sanctions, Ukraine, United States
Asharq live: No EU embargo agreed vs. Russian oil. Some too cautious (Germany), others pro-Putin (Hungary). Yet, EU has months of oil in storage. [EN audio, AR video]
We discussed the EU’s repeated failures to impose an embargo in Russian oil. Now, (after Monday 30 May) they are considering a sea-borne-oil-only embargo.
Posted in Asharq, Energy and Geopolitics, European Union, Germany, Global Oil Market, Interview, Russia, Sanctions, Uncategorized
Tagged Energy, European Union, geopolitics, Germany, Hungary, oil sanctions, oil sector, Russia, Sanctions, Ukraine
Le dije a Radio Clarín Buenos Aires: Putin amenaza con cortarle el gas a la UE/Alemania, pero no tiene otra fuente de dinero. Si lo hace, Biden y la UE organizarán un “Gas-Lift” … [Spanish]
Re: Urgente Pedido de Entrevista Periodística – Corresponsales Clarín y La Nación – Argentina
De Maria E… … Fri, Apr 29, 11:50 PM
Dr. O ´Donnell, … Estas son las preguntas para la entrevista del domingo:
1¿Alemania tiene otra posibilidad que no sea seguir comprando el gas ruso? ¿Cuáles serían sus otras opciones?
Repuesta: Antes que nada, muchas gracias por esta oportunidad de hablar con su audiencia argentina.
Pues, debo señalar que hay dos problemas diferentes: el suministro de petróleo ruso a Alemania y Europa y el suministro de gas ruso a Alemania y Europa. Me preguntas por el gas. El gas es mucho más difícil para Europa y para Alemania que el petróleo Hay dos casos: una reducción gradual o parcial de gas o un corte inmediato.
Un corte gradual se puede manejar bastante bien. Ahora Putin está tratando de dividir y conquistar Europa cortando el suministro de gas a Polonia y Bulgaria.
Un recorte inmediato, ya sea por parte de Putin o debido a las sanciones de la UE, crearía una gran crisis energética en Europa. Sin embargo, es importante entender que, al final, Putin está en una posición mucho más débil.
Si Putin corta todos los suministros de gas a Europa, ahora no hay suficiente gas en el mercado mundial para compensar. Pero Occidente, y especialmente EE. UU., la administración Biden, se ha estado preparando para esto al menos dos meses antes de que Putin invadiera Ucrania, incluso antes de que Europa creyera las advertencias de EE. UU. de que Putin atacaría Ucrania.Continue reading
Posted in Berlin, Climate Change, Ehergiewende, Energiewende, Energy and Geopolitics, Energy and Geostrategy, EU gas, Euroepen Union, gas crisis, Gazprom, gazprom, geopolitics, Germany, Global Oil Market, international relations, Iran, Iran nuclear, Iran sanctions, Latin America, Nord Stream, oil, Oil Crisis, Oil prices, Oil supply, Poland, Putin, Russia, Sanctions, The USA, Ukraine, Ukraine, Uncategorized
Tagged Buenos Aires, Energy, geopolitics, Germany, oil sector, Putin, Radio Clarin, Russia, Sanctions, Ukraine, United States, War
Would EU sanctions on Russian oil cost Germany “too much”? No. Scholz & Habeck pose the wrong questions. [Asharq/Bloomberg live: En & Ar]
24 April 2022: My Asharq/live evening TV news interview is a bit over seven minutes.
Would an oil embargo be “effective”?
I respond, What is “effective”? Clearly it would not end the war. However, a Ukranian soldier who decides to give his life to resist the Russian invaders has no illusion that his or her sacrifice, on its own, will end the war. But, he will makes what contribution he can.
So, the German leadership refuses to send Ukraine heavy weapons, and certainly won’t send German troops. However, Germany and the EU can at least step up and make this contribution – sanctionRussian oil now. This will greatly hinder Putin’s ability, within two to three months, to finance his war.
- We discuss the question raised by the German leadership – by Chancellor Scholz (SPD party), Energy and Environment Minister Habeck (Greens) and Finance Minister Lindner (FDP liberals) – that supposedly an embargo in Russian oil (or gas) would do more harm to German citizens than to the Russian leadership.
- The argument heard repeatedly from Berlin is that this is “not worth it” and also, that such an embargo it “would not end the war.”
- Also, I answer the question of how much oil could Putin’s Russia divert from Europe to India if the EU and Germany embargoed oil.
I think I posed useful answers to these questions given the time we had. Your thoughts and critiques are welcomed, and solicited.
Best, Tom O’Donnell, Berlin
Posted in Asharq, Euroepen Union, geopolitics, Germany, Global Oil Market, Interview, Oil Crisis, Oil prices, Russia, Sanctions, Ukraine, Uncategorized
Tagged Asharg, Energy, European Union, geopolitics, Germany, oil sanctions, oil sector, OPEC, Russia, Ukraine, United States
My Al Jazeera: Defaulting, Putin becomes “Hugo Chavez with nukes.” EU sanctions on Russian oil would force discounted sales “out the back door” to China et al … killing the initial global price spike [English audio. Arabic video]
Note: It is indeed possible for the EU – including Germany too – to immediately cut Russian oil imports to zero and not suffer prolonged high oil prices. How? I will explain in a coming post. This is a topic I have been working on intensively the past couple weeks.
I mention some of my (and others’) rationale for saying this in my answer to the second question from Al Jazeera. NOTE: A very good reference on this is: Christof Rühl speaking last week to bne inelligence. I strongly concur with him. (this note added 15 Mar.)Continue reading
Posted in Energy and Geostrategy, EU gas, Euroepen Union, gas crisis, Germany, Global Oil Market, Global Oil system, Hugo Chávez, Oil Crisis, Oil prices, Oil supply, OPEC, Russia, Sanctions, Ukraine, Uncategorized
Tagged European Union, oil, oil market, oil prices, OPEC, Putin, Russia, Sanctions, Ukraine, USA
My Al Jazeera comments: OPEC+ strikes delicate balance as UAE & Russia defy Saudis
Here’s an English transcript of my Al Jazeera comments on OPEC+ negotiations and some further remarks on the group’s agreement to raise production.
Good evening from Berlin.
Answer 1. Well, OPEC-Plus is faced with maintaining a very delicate balance.
On the one hand, demand in the Western world is down, its weak, while in the Eastern world, in Asia – in China and India – demand is relatively strong. And this is a complicating matter.
At the same time, in supply, in Libya, for example, the oil production is not under the [OPEC+] agreement and has been coming back on the market.
OPEC has been doing relatively well, in the last few months or so, of balancing the market. The question is, how to maintain this going forward, with its exports, how to balance supply with demand.
But what is appearing is not the big split between Russia and Saudi Arabia that we saw last year in the Oil Price War. Now we have differences … such as we see with the UAE [i.e., versus the Saudis]. The UAE would like, as we have seen, also Russia has said, an increase in production. That would be very difficult for other, more expensive producers to do at this point.
Answer 2: Yes. It does. I mean, of course the UAE has been getting a lot of press [about its demand to increase production], … so it is a matter of how serious the UAE is, and how serious the Russians are to want to raise production in some way.
Posted in AlJazeera, Energy and Geopolitics, Global Oil Market, Global Oil system, Oil prices, Oil supply, OPEC, opec-plus, Russia, Saudi Arabia, shale oil, Uncategorized
Tagged oil market, oil prices, OPEC, OPEC+, Russia, Saudi Arabia, shale oil, UAE
Oil Price War 3: My AlJazeera spot on negative price, Putin’s rout, shale, and Trump’s dilemma: independents v big oil
The 24.04 video: Aljazeera asked me about negative prices and we got into storage, Putin’s huge blunder in launching the price war, the fate of US shale, and the dilemma faced by Trump and the Texas Railway Commission on cutting US production: there’s no way to please both the independent US producers and the big US international oil companies. One or the other is going will be very upset. (Note: English audio record replaces original Arabic here. Thanks to AlJazeera for the clip.)
Facing urgent oil-cut decision, Trump & Texas Railway Commission dither
Let me expand a bit on this point I made at the end of the interview: Trump is dithering as the day of reckoning approaches – the day when US oil’s physical storage is full. Then it won’t be just the WTI Nymex futures price going negative overnight, the physical, spot market would go negative and freeze up.
So, either Trump has to invoke national security and use federal powers to order proportional, across-the-board cuts nationally, or the Texas Railway Commission and its Continue reading
Posted in AlJazeera, Energy and Geopolitics, Global Oil Market, oil price war, Oil prices, Oil supply, OPEC, opec-plus, Putin, Rosneft, Russia, Saudi Arabia, Sechin, shale oil, Uncategorized
Tagged COVID-19, oil, oil price war
Decoding the Oil Price War 2: My Wikistrat webinar “Oil Price War & COVID Crisis” transcript
My Wikistrat webinar transcript “Oil Price War & COVID” from a couple weeks ago is now available on their website as a PDF. Issues discussed include:
- Why did Moscow declare the “war”? [Note: Putin & Sechin’s initial boasts Russia would hold out for “years”, kill shale & end sanctions all stopped in only a couple days!]
- The Saudi response was sharply focused against Russian oil-pipeline markets in W Europe (Druzhba) & Asia. [I believe this focused Mr. Putin’s attention on economic realities as opposed to Mr. Sechin’s anger-driven desire for revenge against US sanctions that had inflated his (self-)image of Rosneft and Russian oil-market prowess when up against a concerted Saudi counter-war, and the prospects of various US responses. Reports are that Putin spend three days on the phone to undo this fiasco and, in the end, had to accept significant cuts to Russian output. See my GlobalBarrel.com post of last week explaining the initial, flawed Russian strategy.]
- The options Trump had to choose from undermine his long antipathy to OPEC. (Did he secretly offer Putin any Nord Stream 2, Ukraine or Venezuela sanctions relief? If so, Congress won’t approve.) Also: Big Oil (American Petroleum Institute) and W. Texas/other independent producers are pulling at Trump in two very different policy directions re. OPEC, tariffs, production controls, etc
- And more (esp. in the Q&A): probable impact on carbon mitigation policies, the China market for LNG, US shale’s financial and production future, etc.
Posted in Aramco, China, Economic Crisis, Energy and Geopolitics, Gazprom, geopolitics, Global Oil Market, international relations, LNG, Nord Stream, oil price war, Oil prices, OPEC, opec-plus, Putin, Rosneft, Russia, Sanctions, Saudi Arabia, Sechin, shale gas, shale oil, Uncategorized
Tagged China, Economics, Nord Stream, oil, oil price war, shale oil, USA
Decoding the Oil Price War 1: Moscow seized COVID crisis to hit US shale, force sanctions relief
The “Oil Price War of 2020” was launched at the worst possible time. The COVID-19 pandemic was spreading to the world beyond China, promising to kill tens-of-thousands, and bring a global economic collapse.
However, this war was not preordained. Things could have gone otherwise from the start. It was a decision, a sort of Pearl-Harbor-esque surprise attack, announced by Russian minister of energy, Alexander Novak, upon his arriving late to the OPEC-plus summit hall in Vienna on March 6.
If Moscow now abandons its all-out war on US shale, it will be because Putin has miscalculated. He was willing to increase the pain for everyone else by exploiting the COVID-19 energy crisis in a half-baked attempt to get out from under the US sanctions. However, the unanticipated repercussions might get too hot for Moscow.
The facts about why Putin decided to launch this oil price war are important to decode. A key aspect to understand is that Moscow’s game plan was to blame the Saudis; and it soon began a disinformation campaign saying the Saudis launched the war.
We shall see, below and in future posts, how this blame-shifting is a stratagem designed to manipulate a section of US politicians and especially independent US oil producers, who traditionally hold strong, anti-Saudi sentiments (to be clear: they have good reasons to hold these anti-Saudi views), to preferentially sympathize with Russia against the Saudis and to lobby Trump and Congress to give Moscow relief from US sanctions.
Whether this Oil War strategy of Moscow can, at least in part, succeed in freeing Russia from US sanctions is not clear. But, Moscow’s is highly motivated to succeed due to the significant constraints these sanctions are imposing on Russia. They include sanctions in retaliation for its war against Ukraine, since 2014, which have undermined expansion of Russia’s domestic oil and gas sector; sanctions which have stalled Russian-German plans to finish the Nord Stream 2 pipeline; and sanctions on Rosneft’s efforts to sustain the Maduro dictatorship in Venezuela.
Today, as explained below, I would say the odds are against Moscow’s success, with the plan bordering on adventurism. The Saudi’s initial response, in so far as it specifically targets Russia’s oil business, is rational; however, by de facto joining the Russian oil price war on US shale, the Saudis will also provoke a backlash from powerful US oil-business and political interests, which is likely precisely what Putin and Igor Sechin hoped to bait the Saudis’ Prince MbS into doing.
Considering the pain the world is already suffering, Putin and Sechin’s callous game to exploit the COVID-19 oil-market crisis must be seen for what it is. Most especially, one should not acquiesce to Moscow’s disinformation campaign to shift the blame elsewhere.
In Vienna: Who started the price war?
For weeks, Riyadh had aggressively lobbied the 10 OPEC and 11 non-OPEC members of the OPEC-plus alliance to agree to a major production cut. This alliance had been born in 2016, of a newfound, market-dictated, yet grudging, Russian-Saudi mutual recognition of the reality that only such a large-scale collective effort could begin to get control of a market in long-term oversupply. By December 2019, their OPEC-plus group had Continue reading
Posted in Energy and Geopolitics, geopolitics, Global Oil Market, oil price war, Oil prices, Oil supply, OPEC, opec-plus, Russia, Saudi Arabia, shale oil, U.S. oil, Uncategorized, Venezuela oil
Tagged Economics, Energy, oil, oil price war, USA
Putin’s OPEC tactics: Iran sanctions and the Saudis [IBD cites me]
Last week, Gillian Rich at Investor’s Business Daily (Washington), asked me (Berlin) and others about the OPEC’s 20-21 June meeting. Below here, I give my views in more detail, including the tie-in to the Trump project to isolate Iran and my comment about Putin likely betraying the Iranians again. The IBD piece is here: Trump Could Make OPEC’s Next Meeting As Dysfunctional As G-7 Summit. 15 June ’18.
We spoke about market and geopolitical aspects. On the latter, I emphasized both the Trump Administration’s evolving plan to sanction and isolate Iran, and Russia’s new role as a central player with OPEC ever since the 2016 joint Russian-OPEC decision to raise production.
That’s when Putin played a new role for any Russian leader. Not only did he coordinate Russian oil policy with OPEC’s, he got personally involved in heated discussions, getting on the phone late in the last night with Iranian and Saudi leaders to get the deal sealed. Continue reading
Posted in Aramco, Chavez, Energy and Geopolitics, Energy and Geostrategy, geopolitics, Global Oil Market, Global Oil system, Hugo Chávez, Iran, Iran nuclear, Iran sanctions, Iraq, Iraqi oil, Mexico, Nord Stream, Obama, oil, Oil prices, OPEC, Putin, Rosneft, Russia, Sanctions, Saudi Arabia, Sechin, shale oil, Trump, U.S. oil, US Foreign Policy, Venezuela oil
China’s big NOCs slash prices to take market from private oil refiners ~ I’m quoted in “China Oil Week”
Last week, I was quoted on my assessment of how China’s “Tea Pot” refineries (small, private outfits) will fare in the face of China’s big National Oil Companies (NOCs) cutting prices to grab the Tea Pots’ business. My main point to Newsbase reporter Saw Wright was that China is far from a completely “free market” and the state can be expected to weigh in on one side or another, complicating any outcome predictions based on market and/or tech strengths and weaknesses. I’m quoted a couple times near the article’s end, here:
Posted in China, Energy and Geopolitics, Global Oil Market, Global Oil system, Oil prices, Oil supply, OPEC, shale oil, Tight oil, Trade and Commerce, U.S. oil, Uncategorized
Tagged China, Economics, noc, oil sector, refineries, shale, tea pots
Trump’s promise to “stay totally independent” of OPEC is populist hype [My IBD interview]
Contrary to his campaign hype (see article below), Trump-as-president will not do anything to interfere with the free flow of oil or gas to or from the USA. As I pointed out in the Investors Business Daily interview (Gillian Rich’s story is below), people central to Trump’s administration – such as Rex Tillerson, his designated secretary of state and former CEO of Exxon, and Harold Hamm, Trump’s fracking billionaire friend he wanted for secretary of energy – are global-market-oriented businessmen who would never agree to disconnect the USA from global energy markets.
The free flow of petroleum through the unified global market traded in US dollars – what I call the “Global Barrel” – is central to the business model of every private as well as every national oil company. Today there is essentially one, global oil price. If you break up the global market by limiting imports or exports, you get national markets with national prices. Then what?
If the US price went higher than the global price due to keeping out cheap foreign oil, Trump’s popular approval would dive. And, if the U.S. price went lower due to a domestic production glut of fracked oil, then his support among business would tank.
Moreover, the unified global market serves as the key element in the world’s collective energy-security system by guaranteeing equal access and prices to all suppliers and consumers. Continue reading
Putin’s new OPEC role reflects the toll of low oil prices on Russia [IBD quotes me]
I was interviewed by Gillian Rich at Investors Business Daily (Washington, DC) on non-OPEC Russia’s role in the production cut. The article of December 9, is below. A few points first:
1: President Putin and his minister of energy Alexander Novak‘s participation in the OPEC decision – actually making middle-of-the-night phone calls to mediate between Iran and Saudi Arabia, plus publicly promising to cut Russian production – is totally unprecedented. Never did the Soviets, nor post-Soviet Russia ever do any such thing previously. Why now?
2: As Rich quotes me as saying, oil prices below $60/barrel impose severe constraints on the Russian state’s income. Indeed, the federal budget has actually been based on $50/barrel, and yet the difficulties are apparent. Although Russian oil production is now at a post-Soviet all-time high, low prices have caused the state’s oil and gas income to severely drop. Here is the EIA’s assessment as of October 2016, showing the correlation of Brent price fall (in both dollars and Rubles) on the left, and the decline in oil and gas federal budget revenue on the right:
But, how much of Russian national export revenue is derived from oil and gas revenue? The EIA (in 2014) puts this at 68%. Here’s the breakdown: 00