Trump to OPEC: Pay for your own military protection

Ann Santiago
September 27, 2018

USA officials, including President Donald Trump, are trying to reassure consumers and investors that enough supply will remain in the oil market and have pushed OPEC to raise output.

According to the Goldman analysts, led by Damien Courvalin and Jeffrey Currie, production from other OPEC producers and Russian Federation will offset losses out of Iran.

Speaking on Tuesday, Trump said that OPEC members were "as usual ripping off the rest of the world". We defend many of these nations for nothing and then they take advantage of us by giving us high oil prices... He called on other nations not to rely on OPEC, lamenting the dependence Germany has on Russian Federation.

Crude oil is off of recent highs with WTI crude barrels back into the 72.00 level after peaking at 72.72, driven higher by incoming United States sanctions on Iran and concerns about immediate supply being able to cover the loss of Iranian production in global markets. "It's good for peace and it's good for the shape of the global price of oil". The refusal of OPEC to raise production negates the call by Trump for action to raise global supply. Brent rose on Tuesday to its highest since November 2014 at $82.55 per barrel.

Mr. Rouhani also did not rule out talks, but a change in USA policy will be needed first.

OPEC signaled that it wouldn't rush to release more oil to the market, but would work to meet demand.

Oil markets continue to bid up on Iran sanction concerns, but U.S. inventory pile-ups are helping to ease topside pressure. This puts pressure on other nations to lessen crude imports from Iran as well.

However, oil prices rising is nothing new in the face of the global market.

The bank's analysts said in a note Tuesday that "another supply catalyst beyond Iran would likely be needed for prices to meaningfully break to the upside".

Iran's oil minister has said the United States will not succeed in its plans to halt Iranian crude exports even as he acknowledged that South Korea has stopped buying oil from Tehran, Iranian media reported on Monday.

U.S. crude inventories rose by 1.9 million barrels in the week to September 21, according to U.S. Energy Information Administration (EIA) data.

Oil at $100? Not so fast, says Goldman Sachs. By New Year, Mr. Luckok said, as markets tighten, the price could go as high as $100.

Most of the potential supply shortfall has already been priced into the contract, Again Capital's Kilduff said.

The sanctions are expected to have an immediate impact on exports from Opec's third largest producer.

Release of USA crude data will be watched closely by oil investors going forward.

It said crude oil and condensates exports were 2.8 mbd in April and are now estimated at 2.0 mbd in September.

Other reports by

Discuss This Article