Tag Archives: 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.

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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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 ntv.de| So schwer ist es, Venezuelas Ölinfrastruktur zu retten| How hard is it to restore Venezuela’s oil infrastructure

Investitionswillige Unternehmen stehen in Venezuela vor großen Hürden: Sicherheitsrisiken, eine verfallene Infrastruktur, ungeklärte Rechtsfragen zum US-Einsatz und die Gefahr langfristiger politischer Unruhen. (Foto: IMAGO/IlluPics)

Trumps Plan klingt ambitioniert: US-Ölkonzerne sollen nach Venezuela zurückkehren und Milliarden in die stark beschädigte Infrastruktur investieren. Im Interview erklärt Energiestratege Thomas O’Donnell, wie schnell das Land nach Jahren politischer und wirtschaftlicher Krise wieder zu alter Stärke finden kann.

ntv.de: Trumps Versprechen klingt vollmundig: US-Ölkonzerne sollen nach dem Angriff auf Venezuela ins Land zurückkehren und Milliarden von Dollar investieren, die stark beschädigte Ölinfrastruktur reparieren und damit beginnen, Geld zu verdienen. Wird dieser Plan aufgehen?

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I was interviewed 05 Jan. by Juliane Kipper, Business Editor at Germany’s ntv.de, for this print article. Lies es Auf DeutschRead In English (from Google Translate). Or, read at ntv.de.

Investitionswillige Unternehmen stehen in Venezuela vor großen Hürden: Sicherheitsrisiken, eine verfallene Infrastruktur, ungeklärte Rechtsfragen zum US-Einsatz und die Gefahr langfristiger politischer Unruhen. (Foto: IMAGO/IlluPics)

Trumps Plan klingt ambitioniert: US-Ölkonzerne sollen nach Venezuela zurückkehren und Milliarden in die stark beschädigte Infrastruktur investieren. Im Interview erklärt Energiestratege Thomas O’Donnell, wie schnell das Land nach Jahren politischer und wirtschaftlicher Krise wieder zu alter Stärke finden kann.

ntv.de: Trumps Versprechen klingt vollmundig: US-Ölkonzerne sollen nach dem Angriff auf Venezuela ins Land zurückkehren und Milliarden von Dollar investieren, die stark beschädigte Ölinfrastruktur reparieren und damit beginnen, Geld zu verdienen. Wird dieser Plan aufgehen?

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My TVP: To cripple Putin, Trump can sanction oil ports, let Ukraine strike them / Seeking a new North Stream deal is Merkel 2.0; realism is a new, nuclear ‘Green’ Deal

[TWO “discoveries” just after this interview:

First, Bloomberg reported Ukraine had destroyed an oil pumping station on the pipeline feeding Russia’s big Ust Luga oil export terminal on the Baltic Sea. This is the first time Kyiv has shutdown a Russian oil port, … which is exactly what I advocated in the interview above and since early-2024 as a military tactic to accompany imposition of “real” USA-EU oil sanctions on the three Russian west-facing oil ports, replacing the failed “oil price cap” policy.

Second, Christof Ruhl, former-BP VP, and -World Bank Moscow rep., now at the Columbia U. Energy Center, had an OP-ED in the FT, with a similar argument that Russian oil can be replaced with OPEC crude. I recommend it: Trump should call on Opec in his bid to negotiate with Putin Ukraine’s western allies must join forces with the oil cartel to really squeeze Russia’s war economy” Christof Ruhl, 30jan25.]

There are two topics in this interview with Diana Skya of Poland’s national broadcaster, TVP:

  1. Putin’s oil export income can be slashed via new sanctions and military policies, in line with Trump’s interest in forcing a “deal”
  2. EU member states that seek a new Putin gas partnership are dysfunctionally replaying Merkel-ism and avoiding the real solution of reforming the Green Deal to put nuclear energy in the center. (See: “EU debates return to Russian gas as part of Ukraine peace deal. Advocates say reopening pipelines could help settlement with Moscow and cut energy costs” Henry Foy and Alice Hancock in Brussels and Christopher Miller in Kyiv, FT, 30jan25)
  1. OIL SANCTIONS:

I have argued for three years that the rationale behind the USA-EU imposition of a Russian “oil-price cap” rather than simply imposing real oil sanctions has been flawed, and the policy has failed.

It was conceived in early-2022, apparently by former-central-banker Mario Draghi of Italy and taken up by then-USA-Treasury-head Janet Yellen, neither of whom understood global oil trade sufficiently to see how easily the Russians could get around this scheme, as they have with a “shadow fleet” of oil tankers insured by Chinese, Russian or other non-EU, non-UK firms.

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My Al Watan(Cairo): Iran would seek global energy crisis if an Israeli/USA strike threatened regime survival | IEA warns on EU winter gas

ENGLISH Interview | Al Watan, Cairo.  Thurs 10Oct24. 15 minutes
ARABIC Interview

At first, we focused on IEA warnings of a possible EU winder gas shortage due to supply-and-demand mismatches. I agree and expand on the IEA points.

Second, I explained that if Israel retaliates against Iran so strongly that it threatens the regimes survival, or is seen as intending to provoke regime change, then the Iranian leadership will have “nothing to lose” by in-turn escalating to the maximum. Aside from unleashing the maximum response of its proxies surrounding Israel, Tehran’s most potent weapon would be to spark a global oil and gas crisis.

Consider oil: Iran can either shut down the Straights of Hormuz (or simply make them unsafe for tankers) and/or, it can use missiles and drones to destroy significant parts of Saudi, UAE and other Gulf oil facilities, including perhaps even Azerbaijan’s as some Iranian propagandists have threatened.

Consider natural gas: Shutting the Straights or directly hitting Qatar’s massive LNG exports infrastructure would immediately stop Qatari LNG exports. As the world’s second largest LNG exporter, this would immediately cause a separate global natural gas crisis.

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1st “Berlin Energy Forum” 21 May | A monthly disruption of the local ‘energy echo chamber.’

Dear Colleagues & friends, Below is an invite to our first Berlin Energy Forum (jump to details | jump to register), but first a personal note.

First, a personal note: As some of you know, this is an idea I’ve been floating in Berlin since well before Corona. Then, last October, I had an experimental test run, a one-off, sponsored by the Qatari embassy’s Divan – and it went very well.

However, the biggest success from that event was that Ben Aris, co-founder and editor-in-chief of bne IntelliNews enthusiastically joined me to found the Berlin Energy Forum as a regular monthly sort of membership club. Amongst the longest serving foreign correspondents in Eastern Europe, Ben has been covering Russia since 1993, with stints in the Baltics and Central Asia. He is a former Moscow bureau chief for the Daily Telegraph and was a contributing editor at The Banker and Euromoney for a decade amongst writing for many other publications. He is also a professional photographer, and nowadays based in Berlin.

Ben is one of those rare people who relishes doing analysis and data-driven writing (non-stop!), AND who knows how to do business – and thoroughly enjoys doing it. Just the partner for this endeavor.

My model and inspiration for this forum was always the New York Energy Forum, which has run for over 40 years now. I happily attended while teaching in NYC. My experience with that forum, plus familiarity with a few top DC think tanks, and various foreign diplomats (esp. in NYC/UN), is how, as an academic, I got to know a broad spectrum of USA oil and gas executives, journalists, financial-institution analysts and government officials. Those personal connections have, over the years, anchored my assessments of USA, of OPEC MENA-and-Latin American members’, and of Russian and Chinese strategy. This sort of community doesn’t exist in Europe in such a focused manner, save perhaps in London. Perhaps we can now bring a bit of that world to Berlin with our new BEF.

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Why USA alarm? [PL/EN] Analityk: Ukraina pokazała, że może zakłócić eksport rosyjskiej ropy przez porty /Analyst: Ukraine has shown it could disrupt Russian ports exporting oil

Money.pl Getty …

In an Easter Sunday interview in 20+ Polish papers [POLISH & ENGLISH below], I said White House reasons for Ukraine not to hit Russian refineries don’t make sense. The “elephant in the room” alarming DC is that Ukraine can now disrupt Primorsk, UST-Luga and Novorossiskya oil ports, needed for 60% of Russian exports.

This would not only deny Moscow vital oil revenues needed to wage war, it would also spark a spectacular global oil market shock. I explain that the USA and allies can urgently prepare for this, while the Ukrainians are still maintaining strategic patience.

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My EuroNews-Serbia: Will oil hit $100? Who suffers? Saudis’ market logic. IEA says Q4 tight. Russia oil-price-cap impact.

Today (Mon., 12.09.23; 12:16 CET) EuroNews-Serbia interviewed me (Video has English audio-overlay).
I explained:

  • Saudi logic for cutting, with Russia, about 125 million barrels from the market so far, and by the end of 2023 some 245 million barrels [1] is its prediction of soft demand due to China’s slow recovery and somewhat the EU too; plus the Saudi minister points to central banks continuing to fight inflation with high rates.
  • However, the IEA disagrees, seeing a shortage of supply in Q4. I added that the market is in backwardian, and so agrees with IEA.
  • My assessment:
    • Price over $100 is likely this year; it is after all fairly close now, in the 90’s.
  • I answered a question about who gets hurt the most from high prices.
    • It is the countries who do not produce oil and are relatively poor. So, mainly some states in Asia and So. Asia, Africa and Latin America.
    • As for Europe, rising oil price will be somewhat inflationary; especially hitting Eastern Europe, where inflation is generally still a greater problem.
  • However, I pointed out that compared to historical peaks in 2008-09 and 2010-11, $100 or even $125/bbl or even higher prices are needed to begin approaching the REAL price of oil back in those cases.
    • So, $100 oil is now not so inflationary as it was back then (and in general oil is not as inflationary as it was in the last century, because economies have larger service and knowledge sectors that are not as strongly affected by fuel prices as manufacturing and chemical industries.
  • I also explained that the Russian oil price cap sanctions have actually “put money in the pockets” of people in poorer states, as its enforcement meant that Russia, while still selling its oil, has been forced to sell it cheaper.
    • In particular, up till the start of last month (start of Sept), Russia was losing about half the revenues it would have ordinarily made on its oil exports. (This can be seen on a chart recently released by the USA Treasury Department. [3])
    • However, as a higher percentage of its oil (about 75% now) is sold via tankers that are not owned or insured by the EU or UK , it can be sold at higher prices without falling under the price cap enforcement mechanism. This higher price is, then, also now contributing to the higher price of oil on the global market. [2]
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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]

Above: English Audio – translator asking question (low) and my (louder) answers.
Al Jazeera interview, Doha [Arabic] on the ramifications of the Russian Central Bank default due to USA sanctions. (13 Mar 2022, 22:40, from Berlin).

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.)

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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.

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How fast can Libyan oil recover? (I’m quoted by CNN)

160719181131-chart-libya-oil-production-780x439

CNN 20 July 2016

The oil market remains glutted, with price in the mid-$40’s.  Despite furtive hopes over recent weeks  by the business press about “imminent re-balancing” of global supply v. demand and about “draw downs” of record-high global storage inventories, data reveal only incremental re-balancing has occurred since fall of 2014 when this all began. (And, from November 2014,  the Saudi’s responded by fighting for their market-share rather than for boosting price, which would have been impossible for OPEC to do on its own given the huge supply glut.)

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Don’t write off American oil boom despite OPEC – CNNMoney cites my analysis

cnn_money-chart-oil-production-down-slow-01jun16

I was interviewed today by CNNMoney’s Matt Egan on what  OPEC should expect from US shale as they hold their 169th “Ordinary Meeting” in Vienna tomorrow (2 June).  Indeed, at some point oil production and demand will balance (likely in 2017), and then the Saudis and OPEC will have to cautiously test the presently unknown dynamics of high-tech US shale on the rebound. -Egan cites my point  of view in his article. Read on … – Tom O’D.

Don’t bet against the resilience of U.S. oil companies

by Matt Egan @mattmegan5 CNNMoney (New York) June 1, 2016: 12:23 PM ET

Many expected U.S. oil output would collapse under the weight of a lengthy price war with the mighty OPEC, the fractured oil cartel that’s meeting in Vienna Thursday.

The U.S. oil boom, fueled by the shale revolution, has obviously taken a few punches from OPEC’s strategy of all-out pumping. But the latest numbers show that American production continues to remain stubbornly high in recent months despite the crash in crude to as low as $26 a barrel in February.

The U.S. pumped 9.13 million barrels per day in March, down by a miniscule 6,000 barrels from the prior month, according to stats released this week by the U.S. Energy Information Administration. That represents a deceleration from recent monthly declines. By comparison, daily U.S. output dropped by 58,000 barrels in February and by 83,000 barrels in December.

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