Trump OPEC Bluster Falls Flat; Oil Prices to Rise
In its meeting over the weekend, OPEC dismissed Donald Trump’s insistence that the organization increase oil production. Just about everybody in my network expected the rebuff. Any official decision to change OPEC production levels would have required ministerial approval and the weekend meeting in Algiers was not such a meeting.
What did emerge, however, was a growing frustration among my OPEC contacts. Already, as one noted via telephone to me yesterday, “we have regularly ignored his petulance,” he said, adding, “but this latest round of bluster borders on an attempt to insert [American] domestic politics into OPEC internal policy.”
That view is widely shared. Many in the Persian Gulf – even among my colleagues in nations more amenable to US interests – regard the reason for Trump’s problem as largely self-inflicted.
While the global oil balance between production and demand has been narrowing for some time, a White House decision to initiate a tariff war combined with the unilateral re-imposition of sanctions against Iran have certainly exacerbated the situation. The result has been significant upward pressures on price.
Here’s where the politics come in. Moving into a critical off-year election, concerns emerge over rising oil prices translating into increasing consumer costs for refined oil products. A sensitive political mantra renews: “Gasoline votes.”
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Originally Published at: Trump OPEC Bluster Falls Flat; Oil Prices to Rise