So, I do not understand the full picture. Anyone here who can, please explain. As Mr Trump, said, we (US), have lots of oil, double than we need, we got Venezuela (paraphrasing). So, for an uninitiated person like me, I don't understand why it's affecting oil prices in USA, and why US removed the sanctions from Russia and Iran. Thanks.
Why did US remove sanction Russian and Iranian oil?
byu/Lost-Letterhead-6615 inoil
Posted by Lost-Letterhead-6615
18 Comments
it’s because he is a fool, and he was influenced by others into this situation. High oil prices will decrease economic activity across the entire globe. He believed that it would be like Venezuela. This is because he is a real estate developer and television personality.
Trump has basically undermined his own conflict/geopolitical interests.
Three more years at this rate and the US will be irreversibly harmed on the world stage.
Oil is global commodity and priced globally w s/d mechanics. It doesnt matter if you got a lot of oil if its not above ground and in usable form.
Its not you its them
As a serious answer, not all “oil” is the same. Crude can be very different depending on the environment that it comes from. The refining process is so delicate that refineries typically only handle one type of crude. If you want it to handle a different “type” of crude you have to completely retool the refinery.
Why does this matter? Because U.S. refineries are not set up to actually handle the bulk of the crude that we frack. This has a lot to do with our infrastructure being built decades ago but our fracking production being fairly recent. As a result, to actually have useful oil products U.S. companies mostly import “sour” crude and export our fracked “sweet” crude. This is the arrangement that was most profitable since oil is a global commodity and other countries have refining capabilities that handle “sweet” crude. This is also why Trump’s “drill baby drill” slogan was always idiotic. Increased production of our crude would just be shipped overseas (mostly).
When it comes to Venezuela their crude is even more “sour” than our typical crude. Even without global disruptions it would still take months to years for the U.S. to establish the right processes and infrastructure to handle their crude.
So because of all those factors, the only solution is to do things with an immediate effect which is to remove sanctions (though all of this was avoidable by simply not going to war)
Oil companies like money and if they have US oil that someone is willing to pay a higher price for than the US markets, they will sell it for the higher price which makes it more expensive for everyone.
Say you have a barrel of oil to sell that you got in West Texas. Refiners in the US offer you $80 for that but someone in the UK offers you $100 so obviously you are going to sell it for that price. That means now the US buys now have to offer you $101 to be be able to beat other the other guys.
Here’s the thing that people don’t seem to get. It’s not “our” oil. It doesn’t belong to us a country. It’s some corporation’s oil and they are going do with it whatever makes the most profit, and if that’s selling to someone else at a higher price and driving up our gas prices, which also equals more profit, they will do that, have been doing this, and will keep doing it until prohibited, which will never happen due to graft.
I’m guessing so US allies who otherwise participated in the sanctions would have the chance to purchase it while there’s a shortage. It’s not really going to lower the costs cause that oil was going to get purchased by someone one way or another.
Because we’re winning
🥳 n da 🇺🇸
Just because he coup’d Venezuela doesn’t mean oil automatically appears on the market. All the pipes & refineries etc need to be rebuilt in Venezuela. All this takes billions of dollars of investment & years of construction.
None of that oil is getting onto the global market anytime soon in sufficient quantities to replace the amount oil lost due to the ME infrastructure that Trump destroyed.
Understand that what Trump has done has created a greater oil shock than the two oil shocks of 1973 & 1979 combined.
Each of the crises saw the world lose about 5 million barrels per day. As of a few days ago, we’ve lost 11 million barrels per day.
Because the economic damage the US is doing to both itself and the whole world is increasing week by week. Oil wells are being capped. Refineries turning off. Ports burning. What happens is that real oil prices increase regardless of where you are and while us oil will be last, it will increase. If this continues there is demand destructions and then shortages in the third world. The current admin might survive internally making the largest strategic mistake in 70 years but everyone else is spitting mad. It might be different if there had been any plan to control or mitigate this but your current admin is inept and callous. Now imagine every ambassador is screaming this at you. You are seeing your soft power dissolve in real time and the hard power now has this massive caveate because, I’ll repeat this again, you fucked up strategically. You have no allies and no plan. So you surrender your other goals, such as sanctions, in an attempt to cover your ass.
Because Trump didn’t believe Iranian threats.
This isn’t Trump being a Russian tool, or anything like that.
This is because modern societies run on oil, and this is a disaster of epic proportion.
The administration panicked when bond rates and oil prices shot up together. And since this administration doesn’t seem to know anything, they thought they could bring it down under control by lifting sanctions while not realizing how much it would undermine the US agenda.
Oil and gas prices are arrived at on world markets, not limited to the US. He removed sanctions on Russia, as he is beholden to them and compromised, and on Iran, because the “plan”, is not going according to plan.
So Trump could seize the tankers that were already at sea, like he did with Venusualan oil.
The U.S. recently issued a limited exemption from sanctions for Rosneft’s German refining assets, specifically the PCK refinery in Schwedt, which is now allowed to operate without risk of U.S. secondary sanctions. This exemption, announced on March 5th, is narrow in scope and applies only to these German entities, not to a broader lifting of sanctions on Russian oil. This decision was meant to ensure fuel supply to Berlin and Brandenburg, but it hasn’t changed the overall sanctions framework.
Desperation
Because Australia’s about to run out of fuel so we need russian oil.
Cause we won the war.