IS SAUDI ARABIA SENDING A MESSAGE TO BIDEN

[JoMack + 547]

OPEC has agreed today that there will be no production increases on the global market while Russia and Kazakhstan are raising output by small amounts.  Oil hit $65.48 this morning and it appears that the signal from OPEC is impacting oil prices significantly for the moment.

This might be OPEC just stabilizing the market to watch the recovery from the coronavirus around the world, or is the Crown Price Mohammed bin Salman sending a message to Biden that he can hit him where it hurts - gas prices.  After Biden halted arms sales to Saudi Arabia and pulled the U.S. support on the conflict with the Iran backed Houthi rebels in Yemen, Biden certainly shot across Salman's bow that his alliance with the US under the Trump Administration was over.  Salman is certainly not one to accept this move to pull away from SA without so much as a phone call, as we saw when Russia added 500,000 bbls of oil in March 2020 during the height of the pandemic and SA took them to task and added 3 million to crush the price to -$36 a bbl.

But, the icing on the cake was Biden's decision to release the intelligence report on the killing of Jama Khashoggi in Turkey in October 2018.   The report was withheld by the Trump Administration but the classified assessment sent by the CIA to Congress was soon leaked in 2019.  So, everyone reported on bin Salman's involvement and that he ordered the killing, and it has continued to be reported after the murder and to this day.  Since the Biden Administration has been burning through the policies of the Trump Administration, the Middle East actions by them are being scuttled by Biden without any thought to possible consequences.  In my opinion the release of this report was again a smack against Saudi Arabia and as Biden said on the campaign trail he suggested that Saudi Arabia should be made a pariah that they are over its alleged human rights abuses.  Since Biden and family are in bed with China, their human rights abuses are just, "cultural".  So it is a question as to Biden's intentions since his most significant foreign policy move will be to enter again into the Iran Nuclear Deal.  Of course, Iran shows its willingness to cooperate by sending ballistic missiles into American bases in Iraq.  So, we know Biden's foreign policy is reaching into the past since he is no longer available in real terms to understand what is happening around him today let alone what's going on elsewhere.  

The problem with having the Saudis as a "pariah" in Biden's foreign policy is Biden's wish to cut crude oil and natural gas in significant amounts to invest taxpayer dollars in the trillions on his green agenda.  Crude oil exploration and development was crushed by the pandemic, along with the Saudi-Russia war on production output in March, 2020 by flooding the markets with 3 million bbls at a time when demand was zero and now supply is down from a high of 13.5 million bbls a day to 10.8 million bbls a day.  

 At the time U.S. production was rising in 2018-2019,  SA imported 700,000 bbls into the U.S.  Now, as investment in fossil fuels is drying up and the Majors are moving its major investments into renewables, it should be assumed that the U.S. will continue to lose production.  The problem as our supply is reduced back to the Obama era in the 9 million bbl or less OPEC, with SA as the largest and most significant producer will have significant impact on energy prices as never before.  Machin in the Senate has stated that he will back the nomination of Deb Haaland as Director of the Department of Energy.  She's a radical environmentalist who protested against the Dakota Access Pipeline which has been moving 580,000 bbls of crude from the Bakken in ND for 3 years.  She is also no fan of driving on federal lands and will place a permanent ban on drilling on federal lands, onshore and offshore.  She'll also spend billions on the reclamation of the Jackpile mine on the Laguna Pueblo lands 40 miles north of Albuquerque, NM.  When the mine closed in 1982, ARCO, the Laguna Pueblo, that Haaland belongs to, the DOI and the Bureau of Indian Affairs met and came to agreement that ARCO would pay $44 million to the Laguna Pueblo for reclamation.  In 2016 the Pueblo sued ARCO to cede its responsibility on the reclamation which didn't happen and told the court the statue of limitations had passed.  The court didn't agree so the Pueblo went to the BIA and the Jackpile mine is now a Superfund site.  

I'm bringing the Jackpile mine into the discussion since the WSJ had an article about Haaland and her background and a large part of the article was her story telling about the mine and that she was determined to take the land back for her Native American heritage.  So, this is the character or lack thereof on the nominee for DOI.  So, we'll see her hand on the road to diminishing crude oil and natural gas production, and coal miners were told yesterday that they will lose their jobs and they can mine for components that will be needed for batteries so who knows the job loss she and Biden will bring. The question in all of this is how far will our production slide in 2021-2022 and how high will prices go.  It looks like the Middle East is starting to unravel under Biden in just over a month, and for the U.S., when Biden goes back into the Iran Nuclear Deal, will SA look at this as another slap in the face and pull production further to hit America where it really hurts, at the gas pump.  If OPEC and non-OPEC decide the U.S. is no longer trustworthy, and use crude oil as its weapon of choice, how high will prices go?  Will Biden be able to withstand the blowback?

 

 

[wrs + 893]

Those of us collecting royalties and producing oil are not unhappy about this Biden blunder.  I hated that Trump was in league with that POS MBS to keep oil prices low.  I think Trump learned that low prices at the pump will not get you reelected, high prices may not keep you from being reelected either as Obama had them and was reelected.  It was a miscalculation on Trump's part, he would have been better off working with MBS and OPEC to push for higher prices and that would force China and Europe to kowtow more than the stupid trade war did.

[waltz + 140]

JoMack, you forgot to mention that as retaliation for stopping weapons sales to the Kingdom MBS may/can stop doing business in dollars.  Bye bye petrodollar.  MMT fails as a theory, I do not look forward to the ramifications when the dollar is no longer the world fiat currency.

        waltz 

Edited March 5, 2021 by waltz

[Rob Kramer + 696]

1 hour ago, wrs said:

Those of us collecting royalties and producing oil are not unhappy about this Biden blunder.  I hated that Trump was in league with that POS MBS to keep oil prices low.  I think Trump learned that low prices at the pump will not get you reelected, high prices may not keep you from being reelected either as Obama had them and was reelected.  It was a miscalculation on Trump's part, he would have been better off working with MBS and OPEC to push for higher prices and that would force China and Europe to kowtow more than the stupid trade war did.

Exactly I liked Trump policy except that part. But it first shows gains in USA and increases demand so he was playing the quick win and now its biting back (not under his belt now tho) 

[Gerry Maddoux + 3,627]

3 hours ago, wrs said:

I hated that Trump was in league with that POS MBS to keep oil prices low.

Yours was a commonly shared emotion. 

As you know, Harold Hamm spent no small amount of time trying to drive that point home to Mr. Trump. 

He just didn't get it. But on the other hand, neither Bush-41 or B-43 got it either. 

My liberal daughter has been telling me for months: Wait and see, under President Biden oil prices will soar. 

I fully expect the Middle East to blow up. 

[JoMack + 547]

4 hours ago, waltz said:

JoMack, you forgot to mention that as retaliation for stopping weapons sales to the Kingdom MBS may/can stop doing business in dollars.  Bye bye petrodollar.  MMT fails as a theory, I do not look forward to the ramifications when the dollar is no longer the world fiat currency.

        waltz 

That is a key point, if crude stops trading in the dollar.  It is a very scary outlook to think that oil would instead be trading with a volatile basket of currencies, or worse, the Yuan, I don't want to picture what would happen to the global market if the dollar is no longer traded or accepted around the world.  Could Biden's trillions of dollars in spending and a ticked off Middle East oil giant be enough to wreak havoc on the dollar?  

[RichieRich216 + 454]

Crown Price Mohammed bin Salman: Joe EAT SHIT AND DIE, TAKE THAT VP BITCH WITH YOU.....

[Eyes Wide Open + 3,537]

It is amazing to watch Biden offend the Saudis, back to military actions in Iran and upping the sanctions against Russia. Cutting off the XL pipeline in effect hampering Canada..which seems odd, it would seem the only foreign nation producing oil he has not wrinkled relations with be the North Sea group. Personally i expect a huge rise in oil, perhaps 100 plus per barrel. Now i would assume that would place enough margin back into oil to reinfuse the shale industry's heavy investments

No matter how this nut plays it out one can only see hostility in the ME, or the Saudis and Iranians becoming cozy with each other...and there is Russian interests.

[Gerry Maddoux + 3,627]

1 hour ago, JoMack said:

That is a key point, if crude stops trading in the dollar.  It is a very scary outlook to think that oil would instead be trading with a volatile basket of currencies, or worse, the Yuan, I don't want to picture what would happen to the global market if the dollar is no longer traded or accepted around the world.  Could Biden's trillions of dollars in spending and a ticked off Middle East oil giant be enough to wreak havoc on the dollar?  

The Saudis have long wanted to be paid in gold. So far the petrodollar has held. But now?

Well, this is all coming at an interesting time. During the pandemic the digital yuan has been underwritten by the ABC (Agricultural Bank of China) and is now the currency of choice in China. According to Pepe Escobar (a very well informed Brazilian journalist re' all things China), the commission putting this together for Xi has been agitating to back the digital yuan with gold.

China mines an awful lot of gold. They buy even more. According to one of the Swiss "Gold Bugs," the effort is to back the DY with the same amount of gold that the U.S. backed the dollar with at the Bretton Woods meeting. That would not only give the DY authenticity, but would skyrocket the price of gold. (That price would be something like $40,000/ounce.) 

This gets darker. Much of the Bitcoin in the world was mined, or is being mined, in the same remote province where the Eighurs are being interned. There have been similar implications that the DY might be backed by Bitcoin. 

 

[Roch + 537]

20 hours ago, JoMack said:

.  If OPEC and non-OPEC decide the U.S. is no longer trustworthy, and use crude oil as its weapon of choice, how high will prices go?  Will Biden be able to withstand the blowback?

 

 

Let's get to the facts.

Biden and the Greenies want high gasoline prices. It's part of the plan. 

Saudi's were never colluding with Trump to keep Oil Price down.  It's never high enough for the Saudis.  

Do you seriously think Saudis are concerned about the price of gasoline in the U.S. 

The price of oil was in low $50s right before pandemic because there was too much oil.

The question is how long does the increase in oil consumption in India and China offset the decrease in demand due to EVs .  

No message from Saudis.  They know Biden is no friend of Kingdom. Biden is foolish to think being nice and giving in to Iran is a path to Middle East peace.  The Mullahs are playing him for a fool. 

If war between Iran and Saudi Arabia breaks out whom would Biden Administration back ?

Biden's problems with Trump's Iran policy were : 

(1) it was working and

(2) it wasn't a Democrat Party plan.  

 

Biden will handle the blowback. His handlers won't tell him about it.  He doesn't watch the evening news , he's in bed by 6:30 to 7:00.

Trump only slept  4 -6 hours a night .   

Biden is only awake 4 - 6 hours a day. 

 

Edited March 6, 2021 by Roch

[Roch + 537]

1 hour ago, RichieRich216 said:

Crown Price Mohammed bin Salman: Joe EAT SHIT AND DIE, TAKE THAT VP BITCH WITH YOU.....

Potty mouth

[hemanthaa@mail.com + 64]

Mr Biden is in a difficult position: if he makes a U-turn on his energy policy, he is damned; if he remains passive, hs is damned too.

[waltz + 140]

2 hours ago, JoMack said:Could Biden's trillions of dollars in spending and a ticked off Middle East oil giant be enough to wreak havoc on the dollar?  

My immediate reaction is that everything seems to work until it doesn’t, petrodollar.  In reality it will take awhile for a new system to be set up and trusted.  The problem is the new US Administration is moving rather quickly, seems to me that everyone else would seem to be incentivized to move at least as quickly.

[waltz + 140]

Gerry Maddoux, I am not sure how to interpret the Bitcoin portion of your post, I honestly do not know what implications are.  On the digital Yaun topic, if China moved to a currency backed by gold it would make their exports prohibitively expensive or they would waste massive amounts to fund a dual currency system which I am not aware of ever ending well.  The quote about nations not having friends but only interests comes to mind.

        waltz 

[waltz + 140]

Gerry Maddoux, I will say on the Bitcoin subject it all depends on the monopoly of arms that governments are expected to have.  Outside of Colombia, Mexico and various African warlord controlled territories governments could enact policies to make Bitcoin exponentially higher, US running the printing press on overtime as currently, or force its value to zero through regulation.  How many bureaucrats/governments willing cede power/control?  I am not sure how this will end but it seems that long term it is more than likely to go one way over the other.

     waltz 

[Gerry Maddoux + 3,627]

I'm not very computer literate so I don't know how to cut and paste. But here's the Pepe Escobar article. Sounds like a drug-lord but he's really a very good journalist. This is from last year. Maybe it's antiquated by now. 

 

Escobar: Get Ready For The Next Game-Changer – The Gold-Backed Digital Yuan

Authored by Pepe Escobar via The Strategic Culture Foundation,

A new, radical paradigm shift is in progress. 

The post-Planet Lockdown world – still a hazy mirage – may well need a post-Planet Lockdown currency. And that’s where a serious candidate steps into the fray: the fiat digital yuan.

Last month, the People’s Bank of China (PBOC) confirmed that a group of top banks started trials in electronic payment in four different Chinese regions using the new digital yuan. Yet there’s no timetable yet for the official launch of what is called the Digital Currency Electronic Payment (DCEP).

The man with the plan is PBOC governor Yi Gang. He has confirmed that apart from the trials in Suzhou, Xiong’an, Chengdu and Shenzhen, the PBOC is also testing hypothetical scenarios for the 2022 Winter Olympics.

While DCEP, according to Yi, “has made very good progress,” he insists the PBOC will be “cautious in terms of risk control, especially to study anti money-laundering and ‘know your customer’ requirements to incorporate in the design and system of DCEP.”

DCEP should be interpreted as the road map for China leading to an eventual, even more groundbreaking replacement of the U.S. dollar as the world’s reserve currency. China is already ahead in the digital currency sweepstakes: the sooner DCEP is launched the better to convince the world, especially the Global South, to tag along.

The PBOC is developing the system with four top state-owned banks as well as payment behemoths Tencent and Ant Financial.

A mobile app developed by the Agricultural Bank of China (ABC) is already circulating on WeChat. This is in effect an interface linked to DCEP. Moreover, 19 restaurants and retail establishments including Starbucks, McDonald’s and Subway are part of the pilot testing.

China is advancing fast on the whole digital spectrum. A Blockchain Service Network (BSN) was launched not only for domestic but also for global trade purposes. A large committee is supervising BSN, including executives from the PBOC, Baidu and Tencent, according to the Ministry of Industry and Information Technology (MIIT).

Backed by gold

So what does this all mean?

Well connected banking sources in Hong Kong have told me Beijing is not interested for the yuan to replace the U.S. dollar – for all the interest across the Global South in bypassing it, especially now that the petrodollar is in a coma.

The official Beijing position is that the U.S. dollar should be replaced by an IMF-approved Special Drawing Rights (SDR) basket of currencies (dollar, euro, yuan, yen). That would eliminate the heavy burden of the yuan as the sole reserve currency.

But that may be just a diversionist tactic in an environment of all-out information war. A basket of currencies under the IMF still implies U.S. control – not exactly what China wants.

The meat of the matter is that a digital, sovereign yuan may be backed by gold. That’s not confirmed – yet. Gold could serve as a direct back up; to back bonds; or just lay there as collateral. What’s certain is that once Beijing announces a digital currency backed by gold, it will be like the U.S. dollar being struck by lightning.

Under this new framework, nations won’t need to export more to China than they import so they have enough yuan to trade. And Beijing won’t have to keep printing yuan electronically – and artificially, as in the case of the U.S. dollar – to meet trade demands.

The digital yuan will be effectively backed up by the massive amount of Made in China goods and services – and not by a transoceanic Empire of 800 Bases. And the value of the digital yuan will be decided by the market – as it happens with bitcoin.

This whole process has been years in the making, part of serious discussions started already in the late 2000s inside BRICS summit meetings, especially by Russia and China – the core strategic partnership inside the BRICS.

Considering multiple strategies to progressively bypass the U.S. dollar, starting with bilateral trade in their own currencies, Russia and China, for instance, set up a Russia-Chian RMB Cooperation Fund three years ago.

Beijing’s strategy is carefully calibrated, like playing go long-term. Apart from methodically stockpiling gold in massive quantities (just like Russia) for seven years now, Beijing has been campaigning for a wider use of SDR while making sure to not position the yuan as a strategic competitor.

But now the post-Planet Lockdown environment is shaping up as ideal for Beijing to make a move. Even before the onset of the Covid-19 crisis the predominant feeling among the leadership was that China is under a full spectrum attack by the United States government. Hybrid War already reaching fever pitch implies bilateral relations will only get worse, not better.

So when we have China as the world’s largest economy by both PPP and exchange rate; still the strongest growing major economy, barring the first semester of 2020; productive, innovative, efficient and on track to reach a higher technological level with the Made in China 2025 program; and capable of winning the “people’s war” against Covid-19 in record time, all the necessary elements seem to be in place.

But then, there’s soft power. Beijing needs to have the Global South on its side. The United States government knows it very well; no wonder the current hysteria is all about demonizing China as “guilty” on all – unproved – counts of fostering and lying about Covid-19.

An “impeding arrival”

A key advantage of a sovereign digital yuan is that Beijing does not need to float a paper yuan – which by the way is being sidelined all across China itself, as virtually everyone is switching to electronic payment.

The digital yuan, using blockchain technology, will automatically float – thus bypassing the U.S.-controlled global financialized casino.

The amount of sovereign digital currency is fixed. That in itself eliminates a plague: quantitative easing (QE), as in helicopter money. And that leaves the sovereign digital currency as the preferred medium for trade, with currency transfers unimpeded by geography and, the icing on the cake, without banks charging outrageous fees as intermediaries.

Of course there will be pushback. As in non-stop demonization of neo-Orwellian China for straying away from the whole purpose of bitcoin and cryptocurrencies – which is to have freedom from a centralized structure via decentralized ownership. There will be howls of horror at the PBOC potentially capable of seizing anyone’s digital funds or turning off a wallet if the owner displeases the CCP.

China is on it, but the U.S., UK, Russia and India are also on their way to launch their own crypto-currencies. For obvious reasons, the Bank of International Settlements (BIS), the Central Bank of Central Banks, is very much aware that the future is now. Their research with over 50 Central Banks is unmistakable: we are facing an “impeding arrival”. But who will take the Biggest Prize?

 

[waltz + 140]

Gerry, Interesting article.  I have been up for 17 hours and am about to open my Nth beer, been home from work for 5 hours.  I will have to read it again tomorrow but the one thing I did gather was that China would let other nations trade the DY freely to obtain the needed DY to in turn then trade with them.  I still do not understand how this will help them with the issue of having a currency that is too valuable to be competitive or that they need to hold down the internal value, ie dual currency.  India went digital, at least officially, a few years ago not sure how that has been actually implemented.  Venezuela introduced the Petro a few years ago as well, that experiment fell flat on its face harder than my head will hit the pillow tonight.  There was speculation at the time that Russia, China, Iran and others advised/assisted in this program to observe and learn.  If a multitude of countries are likely to introduce their own crypto, assuming a capped absolute maximum ala Bitcoin, what does that mean for Bitcoin.  Unfortunately I was never into sci-fi as a kid and at times it seems it is no longer some distant future but the present.  
 

sorry for the lack of paragraphs.

        waltz 

[Strangelovesurfing + 737]

1 hour ago, Gerry Maddoux said:

China is on it, but the U.S., UK, Russia and India are also on their way to launch their own crypto-currencies. For obvious reasons, the Bank of International Settlements (BIS), the Central Bank of Central Banks, is very much aware that the future is now. Their research with over 50 Central Banks is unmistakable: we are facing an “impeding arrival”. But who will take the Biggest Prize?

There were a few recent articles about a digital usd, it certainly does look like everybody’s jumping in the pool

https://www.bloomberg.com/opinion/articles/2021-02-25/fed-s-digital-dollar-would-look-nothing-like-bitcoin?sref=8lmlVGBP

https://www.bloomberg.com/opinion/articles/2021-03-04/bitcoin-s-future-may-be-dwarfed-by-interoperable-central-bank-digital-currencies?sref=8lmlVGBP

https://www.bloomberg.com/news/videos/2021-02-24/we-need-a-digital-dollar-to-counter-china-says-rep-mchenry-video?sref=8lmlVGBP
 

Edited March 6, 2021 by Strangelovesurfing

[ronwagn + 6,290]

12 hours ago, JoMack said:

OPEC has agreed today that there will be no production increases on the global market while Russia and Kazakhstan are raising output by small amounts.  Oil hit $65.48 this morning and it appears that the signal from OPEC is impacting oil prices significantly for the moment.

This might be OPEC just stabilizing the market to watch the recovery from the coronavirus around the world, or is the Crown Price Mohammed bin Salman sending a message to Biden that he can hit him where it hurts - gas prices.  After Biden halted arms sales to Saudi Arabia and pulled the U.S. support on the conflict with the Iran backed Houthi rebels in Yemen, Biden certainly shot across Salman's bow that his alliance with the US under the Trump Administration was over.  Salman is certainly not one to accept this move to pull away from SA without so much as a phone call, as we saw when Russia added 500,000 bbls of oil in March 2020 during the height of the pandemic and SA took them to task and added 3 million to crush the price to -$36 a bbl.

But, the icing on the cake was Biden's decision to release the intelligence report on the killing of Jama Khashoggi in Turkey in October 2018.   The report was withheld by the Trump Administration but the classified assessment sent by the CIA to Congress was soon leaked in 2019.  So, everyone reported on bin Salman's involvement and that he ordered the killing, and it has continued to be reported after the murder and to this day.  Since the Biden Administration has been burning through the policies of the Trump Administration, the Middle East actions by them are being scuttled by Biden without any thought to possible consequences.  In my opinion the release of this report was again a smack against Saudi Arabia and as Biden said on the campaign trail he suggested that Saudi Arabia should be made a pariah that they are over its alleged human rights abuses.  Since Biden and family are in bed with China, their human rights abuses are just, "cultural".  So it is a question as to Biden's intentions since his most significant foreign policy move will be to enter again into the Iran Nuclear Deal.  Of course, Iran shows its willingness to cooperate by sending ballistic missiles into American bases in Iraq.  So, we know Biden's foreign policy is reaching into the past since he is no longer available in real terms to understand what is happening around him today let alone what's going on elsewhere.  

The problem with having the Saudis as a "pariah" in Biden's foreign policy is Biden's wish to cut crude oil and natural gas in significant amounts to invest taxpayer dollars in the trillions on his green agenda.  Crude oil exploration and development was crushed by the pandemic, along with the Saudi-Russia war on production output in March, 2020 by flooding the markets with 3 million bbls at a time when demand was zero and now supply is down from a high of 13.5 million bbls a day to 10.8 million bbls a day.  

 At the time U.S. production was rising in 2018-2019,  SA imported 700,000 bbls into the U.S.  Now, as investment in fossil fuels is drying up and the Majors are moving its major investments into renewables, it should be assumed that the U.S. will continue to lose production.  The problem as our supply is reduced back to the Obama era in the 9 million bbl or less OPEC, with SA as the largest and most significant producer will have significant impact on energy prices as never before.  Machin in the Senate has stated that he will back the nomination of Deb Haaland as Director of the Department of Energy.  She's a radical environmentalist who protested against the Dakota Access Pipeline which has been moving 580,000 bbls of crude from the Bakken in ND for 3 years.  She is also no fan of driving on federal lands and will place a permanent ban on drilling on federal lands, onshore and offshore.  She'll also spend billions on the reclamation of the Jackpile mine on the Laguna Pueblo lands 40 miles north of Albuquerque, NM.  When the mine closed in 1982, ARCO, the Laguna Pueblo, that Haaland belongs to, the DOI and the Bureau of Indian Affairs met and came to agreement that ARCO would pay $44 million to the Laguna Pueblo for reclamation.  In 2016 the Pueblo sued ARCO to cede its responsibility on the reclamation which didn't happen and told the court the statue of limitations had passed.  The court didn't agree so the Pueblo went to the BIA and the Jackpile mine is now a Superfund site.  

I'm bringing the Jackpile mine into the discussion since the WSJ had an article about Haaland and her background and a large part of the article was her story telling about the mine and that she was determined to take the land back for her Native American heritage.  So, this is the character or lack thereof on the nominee for DOI.  So, we'll see her hand on the road to diminishing crude oil and natural gas production, and coal miners were told yesterday that they will lose their jobs and they can mine for components that will be needed for batteries so who knows the job loss she and Biden will bring. The question in all of this is how far will our production slide in 2021-2022 and how high will prices go.  It looks like the Middle East is starting to unravel under Biden in just over a month, and for the U.S., when Biden goes back into the Iran Nuclear Deal, will SA look at this as another slap in the face and pull production further to hit America where it really hurts, at the gas pump.  If OPEC and non-OPEC decide the U.S. is no longer trustworthy, and use crude oil as its weapon of choice, how high will prices go?  Will Biden be able to withstand the blowback?

 

 

I am asking. If crude prices rise in the United States wouldn't we just increase production quickly and export less? Do we not have sufficient potential for energy independence if exports are controlled? If renewable energy has the potential to be used economically it can help but that would take time and needs to be meted out carefully for grid reliability as various energy storage schemes materialize. We also have Canadian and nearby Gulf oil to import. That is non OPEC. IMHO we should not allow OPEC to overly influence our foreign policy. 

[NickW + 2,714]

11 hours ago, Eyes Wide Open said:

It is amazing to watch Biden offend the Saudis, back to military actions in Iran and upping the sanctions against Russia. Cutting off the XL pipeline in effect hampering Canada..which seems odd, it would seem the only foreign nation producing oil he has not wrinkled relations with be the North Sea group. Personally i expect a huge rise in oil, perhaps 100 plus per barrel. Now i would assume that would place enough margin back into oil to reinfuse the shale industry's heavy investments

No matter how this nut plays it out one can only see hostility in the ME, or the Saudis and Iranians becoming cozy with each other...and there is Russian interests.

More chance of hell freezing over. Iranians are ambiguous about Sunni Muslims (my wife is iranian) but from my experience in KSA, the Saudis believe the Iranian Shia clerics are the devil incarnate themselves. 

Persian actors  in Arab films are the same as British in American films - they always play the bad guy😀

[Gerry Maddoux + 3,627]

Not to go too China on you, but the KSA has steadily built an alliance with China and Pakistan, simultaneously. China has historically maintained close ties to Iran, but those have faded a bit. It seems that KSA is supplanting Iran's relationship with China.

To recount, Iran and Saudi Arabia are restive with each other. Iran largely use regional proxies: Lebanon's Hezbollah, Yemen's Houthi rebels, Shiite militias in Syria and Iraq, Palestinian Hamas, the Islamic Jihad. To counter Iran, the KSA has the 3rd-largest defense budget in the world and is the world's largest arms importer. The bad news for them is that many of the weapons are beyond their capability. For example, they have the Patriot missile system but can barely run it. They apparently like jets and their Royal Air Force is their shining star. 

Lately, they have been cozying up to the Chinese. China has encouraged their advances. For example, during the worst days of the pandemic, when oil prices were cratering, the Saudis gave China a special price. Trump had scrapped the Iran deal, his son-in-law had formed a friendship with MbS, and consequently the U.S. turned a blind eye and a deaf ear to the Khashoggi murder and even the China oil deal. That has now changed dramatically. With the U.S. signaling some level of animosity toward the thuggishness of MbS, he has little recourse but to develop a tighter bond with China. 

And that is precisely why I brought up the Digital Yuan and the Pepe Escobar article on possibly backing the DY with gold and Bitcoin (both in large supply in China). Saudi Arabia and other OPEC countries have become increasingly wary of the petrodollar, especially as they see the U.S. Federal Reserve printing trillions of dollars. Bretton Woods is long gone. We're talking fiat currency here, barely worth the paper it is printed on if big-time inflation hits.

However, the Saudis really, really like the idea of gold/Bitcoin. Something like that would drive them to offer better and better deals to China, especially if Xi assures them that he will protect them from Iranian attack--their greatest fear. For his part, Xi is perfectly willing to cut Iran adrift if he has a ready supply of cheap(er) oil from MbS. Both China and Saudi Arabia share the same opinion regarding Pakistan and Afghanistan, and both countries are apparently willing to go along with it. 

Mr. Biden is playing a chess game. He actually wants higher oil prices, which will frustrate the American people and make it easier for him to get his trillions for the green transition. But he has knocked both foreign and domestic in the head at once--the Saudis, the Keystone Pipe--and that makes it a very dangerous chess game.

Every day in this direction makes the Middle East, as well as the Middle Kingdom, a more dangerous place. 

[Ward Smith + 6,615]

16 hours ago, hemanthaa@mail.com said:

Mr Biden is in a difficult position: if he makes a U-turn on his energy policy, he is damned; if he remains passive, hs is damned too.

Oh he's damned alright

[Ward Smith + 6,615]

12 hours ago, ronwagn said:

I am asking. If crude prices rise in the United States wouldn't we just increase production quickly and export less? Do we not have sufficient potential for energy independence if exports are controlled? If renewable energy has the potential to be used economically it can help but that would take time and needs to be meted out carefully for grid reliability as various energy storage schemes materialize. We also have Canadian and nearby Gulf oil to import. That is non OPEC. IMHO we should not allow OPEC to overly influence our foreign policy. 

Given a fair opportunity, we would do exactly that in the US. But the field is definitely tilted and the massive thumb of the Xiden admin is on the scale. You think regulatory capture was a thing before? Just wait, the DNR and EPA "approval" cycles will grow exponentially. 

[ronwagn + 6,290]

1 minute ago, Ward Smith said:

Given a fair opportunity, we would do exactly that in the US. But the field is definitely tilted and the massive thumb of the Xiden admin is on the scale. You think regulatory capture was a thing before? Just wait, the DNR and EPA "approval" cycles will grow exponentially. 

Yes but Biden is already getting a reputation for raising gasoline prices at the pump. The Democrats will soon realize that will not work well for them. Biden has low poll numbers already.

[ronwagn + 6,290]

19 hours ago, Gerry Maddoux said:

Yours was a commonly shared emotion. 

As you know, Harold Hamm spent no small amount of time trying to drive that point home to Mr. Trump. 

He just didn't get it. But on the other hand, neither Bush-41 or B-43 got it either. 

My liberal daughter has been telling me for months: Wait and see, under President Biden oil prices will soar. 

I fully expect the Middle East to blow up. 

How can oil prices SOAR when there is oversupply? If oil prices ever do soar natural gas will eventually increase as a replacement for ICE.