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John Bolton likely to turn up heat on Iran and boost oil prices

Public Policy
  • The appointment of John Bolton as his national security advisor signals President Trump is now looking to pursue a more hard-line approach against U.S. adversaries, like Iran or Venezuela.
  • Bolton, a former U.N. ambassador, has said the U.S. should act pre-emptively against North Korean and Iranian nuclear programs, and his arrival makes it more likely the U.S. will drop out of the Iran nuclear deal.
  • Oil should begin to react to geopolitical pressures around the May 12 renewal deadline for the Iranian deal and when Venezuela goes to the polls later in the month, according to analysts.

President Donald Trump‘s pick for national security advisor signals a willingness by the administration to take a more aggressive stand against U.S. adversaries like Iran or Venezuela —and that could mean higher oil prices in the very near future.

Analysts said the appointment of John Bolton, former U.N. ambassador, makes it even more likely that the Trump administration will withdraw from the Iran nuclear deal when it is up for review in May, and tensions could ramp up against the Middle Eastern country. Bolton succeeds H.R. McMaster, who resigned.

“I can’t think of a more hawkish appointment than John Bolton,” said Helima Croft, global head of commodity strategy at RBC. “He’s a powerful advocate for a confrontational approach.”

Croft also said the appointment leaves the question of whether Defense Secretary James Mattis looks like he’s the only one representing a moderate foreign policy at this point. “Are the Iranians seeing the writing on the wall? Will they curb their activities? His appointment should put the fear of God in them, but who knows.”

Bolton has advocated for pre-emptive action against both Iran and North Korea because of their nuclear programs. His first act may be to successfully encourage Trump to end the Iran nuclear deal, struck with Iran by the U.S., some members of the European Union and other countries as a way to curb its nuclear program in return for ending sanctions on the country, including its oil.

Mattis and former Secretary of State Rex Tillerson had been reluctant to abandon the Iran deal, which also included China and Russia. Further financial sanctions against the country have also been discussed.

Venezuela’s economic crisis is complicating matters and damaging its energy production capabilities. Venezuelan President Nicolas Maduro is running for re-election despite the objections of the U.S. and other countries that the election is unfair. Venezuelan oil already is coming off the market, and could continue to decline as the country’s energy infrastructure deteriorates.

“Even if it’s just additional sanctions on Iran, that could hurt investment in the country and reduce flows of their oil. The market would really miss their oil this time around because of Venezuela,” said John Kilduff of Again Capital. “Because of Iran’s advanced ballistic missile capabilities, the other countries have offered additional sanctions to try to keep Trump in the nuclear pact.”

Oil prices were higher Friday, with West Texas Intermediate futures trading over $65, a nearly 2 percent gain. Gold, benefiting Friday from fears about trade wars, could also gain if the U.S. becomes more aggressive, not just with Iran but others like Venezuela or North Korea. Gold futures for April rose 1.5 percent Friday, to $1,347 per ounce.

Croft said May will be important for oil prices, with the Iran deal up for renewal May 12 and the Venezuela election on May 20. “If they go forward with those elections, we could see much more coercive economic policies toward Venezuela. That’s when the oil market might start paying attention,” she said.

“The oil market is underappreciating the importance of the personnel changes,” she added. “They’re underpricing the personnel changes.”

Global oil demand has been improving and the pact between OPEC and Russia has helped steady prices and send them higher. Growing U.S. production from shale fields like the Permian Basin has added supply while Russia and Saudi Arabia have reduced theirs.

Kilduff said geopolitical tensions have moved prices higher recently, including anti-Iranian comments from Saudi Crown Prince Mohammed Bin Salman, who said that if Iran develops a nuclear weapon, so will Saudi Arabia.

In an interview on CBS’ “60 Minutes,” the prince also compared Iran’s supreme leader, Ayatollah Khamenei, to Adolph Hitler. The prince is currently in the U.S., and met with Trump earlier this week.

Saudi Arabia and Iran are engaged in a proxy war in Yemen, and are at odds on Syria, which Iran has supported.

Croft said if the U.S. drops out of the nuclear deal it could take an even harsher posture toward Iran. “The question is, are we talking about efforts to economically isolate Iran, or are we talking about efforts to change the regime?” she said. “This is where the Permian makes things different. If this had been 2010, oil would be much higher. There’s a view that U.S. short cycle oil makes a difference. We could just make up for anything.”

But Croft doesn’t see proof that U.S. shale could make up for a shortfall in the world market.

“I haven’t gotten any evidence,” she said. “I don’t see any signs that OPEC is going to be quick to rush in and save things.” She said with the changes in Washington, it’s possible there could be 200,000 to 300,000 Iranian barrels off the market by the fourth quarter, and Venezuelan production losses could total 1 million barrels.

Bolton served in the Reagan administration, and President George W. Bush named him undersecretary of state for arms control and international security. Bush also appointed him as his representative to the U.N., which Bolton called irrelevant. Ultimately, Congress blocked his confirmation and he had to step down from that role.

“Bolton is the hawk’s hawk,” wrote Cliff Kupchan, chairman of Eurasia Group. He noted that besides pushing for pre-emptive strikes on North Korea’s nuclear program, he has criticized the planned Trump-Kim Jong Un summit as useless.

“He’s a fierce opponent of the Iran nuclear deal. In 2015, before the deal, Bolton penned an op-ed titled ‘To Stop Iran’s Bomb, Bomb Iran.’ Bolton’s appointment will likely make US policy on both hot-button issues more hardline,” added Kupchan. “At least on the margins, the chance of a strike on North Korea goes up, of successful US-North Korea diplomacy goes down, and the Iran deal is in even more trouble.”

CNBC



221 Comments on "John Bolton likely to turn up heat on Iran and boost oil prices"

  1. Davy on Tue, 27th Mar 2018 2:33 pm 

    No doubt Dresden and other bombing were crimes but the Nazi bomb cities or are you denying that?

  2. Davy on Tue, 27th Mar 2018 2:38 pm 

    Looks pretty serious for you nedernazi. The inevitable assimilation of color into your whitie is going to happen much quicker in Europe than the US. Bye bye racist. Hello multicultural nederNazi lol

  3. Cloggie on Tue, 27th Mar 2018 3:05 pm 

    “No doubt Dresden and other bombing were crimes but the Nazi bomb cities or are you denying that?”

    Again, Meathead is twisting the truth. It was Churchill who in the first day in office ordered the bombing of German civilian targets. Hitler waited three full months until he no longer could postpone retalliation without major loss of face. The German bombing of British targets was minute in comparisson with what the sadistic Anglos did to the Germans FIRST. In the end the Anglos dropped twenty times as much on Germany as the other way around. And then there is Hiroshima and Nagasaki.

    But dear Davy, NOTHING IS FORGOTTEN. You still may have Britain, Egypt, Poland, Sweden, NATO apparatschicks, but the rest in Europe just pretends… or goes along under pressure, expelling two token Russians…

    https://www.rt.com/news/387313-us-losing-leadership-eu-mogherini/

    This is no longer 1941, where you and your mass-murdering Soviet allies could conspire against us in Europe. But now the tables are turning. It is you against the rest of the world, in a country that is deeply divided in itself.

    2025.
    At max.

  4. Davy on Tue, 27th Mar 2018 3:43 pm 

    Sorry nedernazi. The Nazis did civilians first. You are a devious liar and deserve rebuke for those who where
    killed by your Nazi henchmen.

  5. Cloggie on Tue, 27th Mar 2018 3:47 pm 

    “Looks pretty serious for you nedernazi. The inevitable assimilation of color into your whitie is going to happen much quicker in Europe than the US. Bye bye racist. Hello multicultural nederNazi lol”

    You go first asswipe.lol

    46% whites under 20. Do your owners have you by the balls or what?!

    We have 900k Muslims salviating at the thought of taking us over. But deporting them all is so German, so over-thorough. It suffices to throw out all the young Muslim men under 35. Perhaps 300k.

    In 1941-1944, 160k kosher communist bacils were thrown out, on a population about half the size we have now. You see, we have done it before, no difference in scale, It is going to happen again. After the implosion of the West, that can’t happen soon enough.

  6. Cloggie on Tue, 27th Mar 2018 3:48 pm 

    “Sorry nedernazi. The Nazis did civilians first.”

    When was that?

  7. Cloggie on Tue, 27th Mar 2018 3:51 pm 

    Typical Meathead method. Always remaining vague and abstract and non-specific, so he can launch his smears.

  8. Davy on Tue, 27th Mar 2018 3:58 pm 

    It’s in the history books Nazi. Not your wordpress.

  9. peakyeast on Tue, 27th Mar 2018 4:21 pm 

    Keep your friends close and your enemies even closer…

    Now it makes sense that we invite the very muslims to Europe whose countries we have devastated… or something…:-D

  10. Cloggie on Wed, 28th Mar 2018 2:08 am 

    “The German people were victims for the most part but not your Nazis. Your Nazi’s killed wantonly, nedernazi. They initiated the civilian carnage then they were given a taste of their own medicine.”

    What civil carnage are you talking about, Meathead?

    Again Meathead is stomped and he can do nothing against it.lol

    WW2 was the US murdering spree against Europe in order to colonize it and get the intended “American Century” started (that is now over). Nothing else. Everything the US accuses Germany of today, it did itself. Every civilian they could murder, they did murder. Even Anne Frank and afterwards had the nerve to make an icon of the fake holohoax out of her.

  11. Cloggie on Wed, 28th Mar 2018 2:26 am 

    It’s in the history books Nazi. Not your wordpress.

    He is evasive again and he knows it.

    Let’s have a one sentence quotation from these history books. What civil carnage are you talking about that were not a necessary consequence from acts of war, a war that even “justice” Jackson of Nuremberg was forced to admit was forced upon the Germans.

    https://documents1940.wordpress.com/2017/09/26/justice-jackson-has-to-admit/

    (This is not “WordPress”, this contains a direct link to the NMT documents)

    What did the Germans do to justify the barbaric actions of the Allies against the Germans?

    And give me one name and proof of a person who was gassed. Not 6 million, just 1.

    Well…

    tic-toc-tic-toc

    P.S. this is the official Red Cross evaluation of the number of people who died in concentration camps, based on German records:

    https://documents1940.files.wordpress.com/2017/09/cruz-roja-holocausto.jpg

    373k dead, perhaps half of them Jews. No revisionist doubts these numbers.

    Strange that the Germans kept records of people who died and in parallel had an extermination program going on, which doesn’t make sense. Or did the Alllies just made up the holohoax just to create the moral justification for their devastation of Europe in hindsight?

    Thank God, Meathead, millimind or even Greg are going to provide us with at least 1 name and proof.

    And if they don’t, what is the world, that is Europeans, Russians, Chinese, Muslims, supposed to do with the little Anglo-Zionist terrorist in our midst, that wants to have it all and will not stop at any lie to find a fake justification of war against anybody?

    Answer: prepare for WW3. There is no way out. The yapper needs to be taken apart.

  12. Davy on Wed, 28th Mar 2018 6:09 am 

    “What did the Germans do to justify the barbaric actions of the Allies against the Germans?”

    Ask greggie, nedernazi, he rejected your position that Hitler was a victim he also said he was not a Holocaust denier. That should be enough to lower your sails. Greggie has a girlfriend that taught him after sex all the WWII history he knows and he knows so much at least that is what he tells us. I am trying to figure out why he waffled on the “Hitler was a victim thing”, oh well, that is greggie the waffler. BTW, nedernazi, will you please quit spamming the offtopic WWII shit. We know your ass was kicked twice per real history but be a man and pull yourself up.

  13. GregT on Wed, 28th Mar 2018 10:24 am 

    “Ask greggie, nedernazi”

    Cloggie was asking you Davy.

    Still no response. Only more of the usual name calling, childish rhetoric, and delusional accusations.

    Man up Davy. Grow some balls.

  14. Davy on Wed, 28th Mar 2018 11:47 am 

    I am asking you to talk to your buddy. You guys have good Nazi relations.

  15. GregT on Wed, 28th Mar 2018 12:05 pm 

    Cloggie has repeatedly asked you questions directly Davy.

    You have answered exactly none of them. Step up to the plate big boy, or make yourself useful, and go milk your goat.

  16. Davy on Wed, 28th Mar 2018 12:08 pm 

    greggie, you answered them for me after you finally quit your waffling. I can’t believe you thought Hitler was a victim. It just took a little ridicule to get you to embrace the truth. This is what happens greggie when you get in bed with shady characters.

  17. GregT on Wed, 28th Mar 2018 12:28 pm 

    Answer the questions Davy, or continue to lose your argument with Cloggie.

  18. fmr-paultard on Wed, 28th Mar 2018 12:54 pm 

    greg when u have sex with ur PhD gf do u discuss gardening, prepping, and peak oil or just al-tard revisionism?

  19. GregT on Wed, 28th Mar 2018 1:46 pm 

    I don’t have a ‘gf’ tard. I’m happily married to a great woman, and what we discuss, or not, during sex, is absolutely none of your business.

  20. Davy on Wed, 28th Mar 2018 1:52 pm 

    Greggie, you answered the question with the nedernazi. mission accomplished with the board waffler. Lol

  21. Davy on Wed, 28th Mar 2018 1:54 pm 

    Greggie, if you are happily married why did you ask to ass fuck me. Is your wife aware of your bisexual side?

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