MBS here's a plan. Cut Exports . Your Production Cuts are a joke

[BLA + 1,666]

In addition to U.S. participation Russia wants the sanctions dropped.  Hopefully Trump doesn't fall for this ploy. 

First let's talk some rough estimates.  Today Russia, Saudis and U.S. each produce about the same amount of oil between 11 to 13 mm bbl/day.

Production cuts are a farce. Nobody complied. Most increased production.  For example: after oil price crash October 2, 2018 the Saudis substantially increased production for October and November anticipating production cuts  at the OPEC meeting December 4, 2018. The much higher production was used as a base to determine new production level. Saudi quota was actually higher than pre October crash production. Really. Production cuts never worked, never will.  

As long as countries like China have spare storage capacity and want to fill it with $20 to $30 oil Saudis will sell it.  

PRODUCTION CUTS ARE A JOKE.

CUT EXPORTS. THE STORAGE IN EXPORT COUNTRIES WILL FILL UP . . . . THEN YOU WILL GET REAL PRODUCTION CUTS.

If you want to seriously reduce supply you must reduce EXPORTS. It only makes sense. The only chance of reducing supply.  

Now the three largest producers export approx 16 million mm bbl/day. (Rough estimates)

 

Russia exports  5 mm

Saudis exports  8 mm

U..S.  exports.    3 mm

 

So if the 3 top producing countries and the rest of the world producers agree to reduce exports (aka supply) on the market by 25% it might work.  

The three largest producers 25% export reduction would = 4 million bbls less to new total 12 million bbls/day

Russia new export quota 4mm

Saudis new export quota 4mm

U.S.       new export quota 4mm

Since the 3 produce approx same amount of oil they should export the same amount of crude oil or 4 mm bbls/day. 

It's only fair.

Why does Saudi Arabia get to export more oil than Russia and U.S. ? 

Saudis don't know how to compete in free markets.  They only understand industry blackmail.   Remember OPEC threatened U.S. shale producers at the CERRAWEEK dinner in 2018.  Ask Diamondback  CEO. 

Trump needs to listen to former Energy Secretary Perry and ban imports for 90 days and stop the 14mm bbls that Saudis are sending in 7 tankers to U.S. (USMCA TRADING PARTNERS EXEMPT)

 

Edited April 9, 2020 by BLA

[Gerry Maddoux + 3,627]

12 minutes ago, BLA said:

Trump needs to listen to former Energy Secretary Perry and ban imports for 90 days and stop the 14mm bbls that Saudis are sending in 7 tankers to U.S. (USMCA TRADING PARTNERS EXEMPT)

                                                                                                                             two years

(I know what you meant so I fixed it for you.) 😏

[BLA + 1,666]

4 hours ago, Gerry Maddoux said:

                                                                                                                             two years

(I know what you meant so I fixed it for you.) 😏

Thx