by Ruby Henley
American citizens always end up paying a price for political issues in this Country. Those actually responsible for the problems have the luxury of debate, while the average citizen is hit in a critical way.
In this instance, while Country Elites debate the Iran Deal, Americans will pay a high price for oil. I am glad we are not going into the winter season, but we will still suffer at the pump.
We have the following reported on April 23, 2018:
U.S. rig count drifting higher, thanks to higher oil prices. More rigs drilling = higher future production.
— Zach Scheidt (@ZachScheidt) April 23, 2018
The price of one barrel of WTI crude now sits just under $70 — up 11% year-to-date — which means that many of these rigs can once again be profitable.
This is great news for the big, vertically integrated oil companies like Royal Dutch Shell, ExxonMobil and Chevron who not only drill the more valuable oil, but who will also get paid more to refine and transport the growing quantities of U.S. production.
But you might be asking… if more rigs get back online and more oil is subsequently produced, shouldn’t the price of oil start to fall again?
We have the following reported today, May 7, 2018:
Iran fears send US oil above $70 for first time since 2014!
Rising oil prices just passed another milestone, jumping above $70 per barrel in Monday morning trade in Asia.
Oil prices have been climbing partly because of expectations that President Donald Trump will abandon the 2015 Iran nuclear deal, which allowed Iran to export more crude.
This is the first time the US crude benchmark has been above $70 since November 2014.
The focus of oil markets is currently on the US president’s pending decision on the fate of the Iran nuclear deal,” said Victor Shum, an oil industry analyst at research firm IHS Markit.
The recent surge in prices suggests markets are assuming there will be some disruption to Iran’s exports, Shum said. Trump has to decide by May 12 whether to bring back sanctions against the country.
So oil markets are bracing for the decision President Trump will be making on May 12, 2018. He will decide to withdraw from the Iran Deal or to stay in. If he withdraws, look to Americans to pay the price in more ways than one.
Europe is trying to save a deal signed in 2015 under which the United States and other powers agreed to lift some economic sanctions in return for Iran agreeing to rein in its nuclear program.
Trump has vowed to rip up the agreement, which he has described as “the worst deal ever.” He’s now threatening to reject an extension of the agreement ahead of a May 12 deadline.
So who loses out if Trump does decide to abandon the nuclear deal?
Iran has the fourth largest crude oil reserves in the world and claims nearly one-fifth of the planet’s natural gas.
The country has ramped up production since sanctions were eased to about 3.8 million barrels a day. That’s about a million barrels a day more than in 2015.
New sanctions on Iranian oil exports would put a dent in global supply and could cause prices to spike higher. They’ve already soared 13% this year to their highest level in three years, and the price of US gas has jumped to a national average of $2.79 a gallon.
Here we go again, America. You pay the price for what the Elites do in this world, and that will never change.