Oil....Oil!

[phoenixdesi]

Re: Oil…Oil!

@OneYourMomWarnedAbt

At least from US side things are changing. US wants to disengage from the Middle East; they have been looking towards Asia and preparing for a showdown with China. US’s middle east policy has two pillars: Oil and Israel. The increase in oil production from US, discovery and exploitation of new gas reserves in midwest and payoffs from investments into alternate energy sources are helping US wean off of middle east oil. By 2030, US wants to be net exporter of oil and they very well could be. Israel is increasingly perceived as a liability by most think tanks in Washington. So if one pillar falls, the other could soon follow. There are several players out there that are willing to sabotage this: Israel, Arab leaders, neocons, maybe even china. I wouldn’t be surprised if Libya, Syria, ISIS and now Iraq is part of that sabotage. Regardless, there are pieces in place for oil to become irrelevant for US as far as foreign policy is concerned. As for the currency , I don’t think there is any other on the scene yet to replace US dollar. US is still the largest economy in the world backed by a stable political system.

good point..thx but not sure if i completely agree…especially israel part. Yes think-tanks play an important role in shaping USA foreign policy and once in a while you will see articles/debates along the lines “Israel now a liability” but there are no signs whatsoever in US senate and or congress that USA should start positioning itself as a balanced player when it comes to israel…not even in long term. the shameless role USA politicians played in current gaza war was simple pathetic…anyway USA-Israel is a very complicated topic and 2 line version is that it’s a cmplex interplay of America’s long-running Middle East strategy, US public opinion of Israel/electoral politics, and a pro-Israel lobbying campaign in USA senate/congress…

Oil-wise…who knows. Historically USA has kept strict O&G exploration & production policies on the name of environmental regulations (even Republicans have been pretty conservative on this issue if you ask me) and didnt mind keep importing oil… I mean in 2013, about 33% of the petroleum consumed by the United States was imported from foreign countries (for clarity Petroleum includes crude oil and petroleum products both. Petroleum products include gasoline, diesel fuel, heating oil, jet fuel, etc)…considering how dysfunctional US political system has become (i mean it is literally jammed and i am sure you know that), it is hard to imagine both camps coming to terms on this issue easily…it takes god-damn average 307 days to obtain a permit for onshore drilling on federal land…307 days!!!

take shale gas. This is a huge phenomenon and in my view one of the biggest industrial revolution in usa from cost economics stand-point but US congress/senate has been super slow in passing regulations which will allow exporting shale gas to rest of the world..nothing meaningful so far.

but yes, if USA ultimately becomes a net exporter of oil instead of being an importer, it will change the OPEC dynamics …and that is what i was pointing out in original post. OPEC may need to cut down the production to keep oil prices high…so you may see some rift in opec countries. and the biggest hit will be to Saudis considering it will not be able to supplement extra income either once iran/iraq/libya get to their normal production levels..you can therefore understand a lot of saudi actions in oil context