Saudi's are pissed that nobody in the hood are honoring their quotas and seem ready to dump to get their attention. Let the conspiracy theories run if KSA floods the market and drops the price of oil going into the election. Apparently Iraq and Khazakhstan are primary violators. While cheap oil seems good, it would crush the US shale producers if it drops to $50 Saudi Minister Warns of $50 Oil as OPEC+ Members Flout Production Curbs (msn.com) During a conference call last week, Prince Abdulaziz bin Salman, the oil minister of OPEC kingmaker Saudi Arabia, warned fellow producers prices could drop to $50 a barrel if they don’t comply with agreed production cuts, according to OPEC delegates who attended the call. They said he singled out Iraq, which overproduced by 400,000 barrels a day in August, according to data provider S&P Global Ratings, and Kazakhstan, whose production is set to rise with the return of the 720,000-barrels-per-day Tengiz field. The Saudi message was “there is no point in adding more barrels if there room for them in the market,” said a delegate who attended. “Some better shut up and respect their commitments toward OPEC+.”
They would much rather keep oil prices high to favor Trump. The fact that they are doing this is a reflection of what little power they have.
it has constantly broken down since its inception. It’s an N*-country prisoner’s dilemma & they are trying to maintain an outcome contrary to the dominant strategy equilibrium https://www.cato.org/regulation/fall-2023/opec-theater Cheating on the quotas is common among OPEC members. Table 2 presents the average difference between production allocations and actual production by OPEC members for two periods, January 1993–October 2007 and January 2017–December 2022. (From November 2007 to December 2016, OPEC published its overall production targets but did not release individual member allocations.) During the earlier period, all the included members of OPEC produced more than their quota on average. And the cheating was frequent and large: members’ production exceeded their quotas nearly 80 percent of the time, exceeded their quota by more than 5 percent nearly 45 percent of the time, and exceeded their quota by more than 10 percent nearly 30 percent of the time. * according to this art. N = 13 Again demonstrating the futility of socialistic systems
We can replenish the Strategic Petroleum Reserve, make a lot of money doing so and ruin one of our village idiot's favorite gripes. Win, win & win.
It would also hurt Putin...I say just do it, show them violators who runs OPEC and why... I do believe that the left would have a fit in we bought oil to fill the SPR, maybe I'm wrong...
I watched a 60 minute segment about ARAMCO, (the Saudi industrial Petroleum concern) this was maybe 8 - 9 years ago? (I forget exactly how long ago it was) But ARAMCO made gigantic capital investments to the Saudi Petroleum infrastructure. At that time, they reported they needed Oil prices at $70 a barrel to be "profitable". That was then. I imagine you are correct G8tr, projects such as the straight line city (or whatever it's called) may be suspended if your post is accurate. In addition, the USA Petroleum infrastructure has expanded significantly since the new ARAMCO facilities went on line, and obviously the world's energy structure, distribution, consumption and the introduction of new technologies makes things significantly different. It is really interesting what MICROSOFT plans for 3 mile Island. I recently listened to a program about the absolutely unbelievable requirements to "push" A.I. development. It seems Nuclear Energy is coming back into fashion in a big way to facilities this. And of course the projections for "battery" technology and enhancement is fascinating. Trumps buddy Elon Musk, is pushing stock and infrastructure development in the battery development area, obviously because of Tesla but perhaps he is smarting from Twitter (X) having lost 80% of its value since he purchased it.
$70 feeds their social programs to keep the peasants happy and the royals fat. they make money at $30, just not enough to fund all their bad habits. us shale lucky to break even at 50 last time I checked
I’m not really interested in how this move would affect our domestic politics. I am very interested in how it would hurt Russia at a critical time. A drop in worldwide oil prices would be devastating to their sole source of income. If we had not screwed over KSA to please Iran back in 2021 (thank you, again, Jake Sullivan, you strategic genius), then we probably could have gotten KSA to take this action a long time ago.
The answer is not to eliminate it. The answer is to legislatively restrict Presidents from using it except in ways that affect our national security. Opening it up to temporarily and artificially lower oil prices right before an election is something no President ought to have the power to do.
Biden has made significant profits for the US on every SPR transaction. I am unaware of him doing anything "right before an election." Do you have any specific instances in mind? Joe Biden, master oil trader The Biden administration made $66 million in its first oil trade
Every SPR transaction this year has been "right before an election." And it isn't relevant, in my opinion, whether he made profits on it or not or provided temporary price relief at the pump. That is not the purpose of the SPR. I would be just as critical if a Republican president had done the same move. The SPR is a strategic tool, intended to buttress our national security, not a political tool intended to bolster re-election chances.
I mean the president usually gets to decide what our "national security" interests are, so what's the difference? Like if I'm president, I think its in our national security interest to be reelected, because the other guy is a threat to national security according to my campaign. Like if Biden thinks Trump getting closer to Russia affects our national security, then its totally legitimate to lower gas costs to gain reelection, under such restrictions right? Who's going to objectively decide what "affects national security?"
is it in our national security to set a floor on prices so that our domestic production facilities / business enterprises can be maintained if the bottom drops out of oil?
As long as you also have no problem with another President -- say, Trump -- also using any and all of the national security tools their disposal for the purpose of getting re-elected and calling it a "national security imperative" that they are re-elected, then fine. As to who decides what affects national security, that is why I suggest legislation with guiding language. Some events that are obvious to me include war, an interruption of our energy supply chain, major national disaster, etc. I would specify that temporarily decreasing the cost of oil is not a valid national security concern.
I don't know. Is it? Sounds like a healthy debate to have for the legislation that I propose should specify when a President has the authority to exercise the SPR. If it is, put in there, and let future Presidents argue that is their intent, not to temporarily lower the cost of gasoline.
I mean ultimately legislation will result in executive interpretation, and then possible court challenges. So ultimately, it will be the Supreme Court that will determine what is national security based on their partisan or ideological bias. Which at present basically means extreme leeway for Republicans and the opposite for Democrats. I think Doc is right ... its either got to go period as its outlived its usefulness if it ever had any, or the status quo remains to where its not inherently politicized beyond what it is now. If there is a strategic element, I dont think a months long court challenge with various injunctions based on statutory interpretations serves any purpose other than to put even more partisan interests in the mix.
