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Page added on June 5, 2018

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Trump Asked Saudi Arabia To Boost Oil Production By 1 Million Barrels Per Day

It all started on April 20, when having tweeted at and about virtually everything else, President Trump realized that surging oil and gasoline prices are wreaking havoc on his economic agenda and eating away at the benefits from his tax cuts, and so he made it clear when he lashed out on twitter against OPEC which he said was “at it again. With record amounts of Oil all over the place, including the fully loaded ships at sea, Oil prices are artificially Very High! No good and will not be accepted!”

The result was instant, sending the price of oil sharply lower….

… and effectively capping the price oil, which is now at the level when Trump made his warning.

Since then Trump’s stance has only hardened, and because the US president has become an especially good friend with the ruling Saudi regime, there has been a dramatic reversal within OPEC, whose next meeting is now expected to see the cartel and Russia modestly boost oil production to comply with Trump’s demand.

But by how much?

This morning Bloomberg reported the answer, when it said that the Trump administration has quietly asked Saudi Arabia and other OPEC producers to increase oil production by about 1 million barrels a day, or – not surprisingly – just enough to offset expected Iran oil export declines as a result of Trump’s renewed embargo on Tehran.

The rare request came after U.S. retail gasoline prices surged to their highest in more than three years and President Donald Trump publicly complained about OPEC policy and rising oil prices on Twitter. It also follows Washington’s decision to reimpose sanctions on Iran’s crude exports that had previously displaced about 1 million barrels a day from global markets.

As Bloomberg adds, while U.S. lawmakers have habitually criticized the Organization of Petroleum Exporting Countries at times of high oil prices, and the government has on occasion encouraged the cartel to pump more, it’s unusual for Washington to ask for a specific output hike, although not that unusual when one considers just how much effort Trump has put into becoming a BFF with the Saudi rulers. Also, Bloomberg notes that it was not clear precisely how the request was communicated.

The disclosure of the American request emerged over the weekend, when some Arab oil ministers discussed oil production in Kuwait City. The meeting was followed by a statement which pledged to “ensure stable oil supplies are made available in a timely manner to meet growing demand and offset declines in some parts of the world.” And, as reported at the time, Saudi Arabia and Russia last month proposed a gradual production increase, although other members of the group have yet to agree.

While the White House refused to comment on any specific conversations with Saudi Arabia, a spokesman told Bloomberg that “we welcome any market-based action that increases energy access and fosters a healthy global economy.”

Treasury Secretary Steven Mnuchin hinted last month that Washington had “various conversations with various parties about different parties that would be willing to increase oil supply to offset” the impact of U.S. sanctions on Iranian oil output. Only four countries among OPEC and its allies hold enough spare production capacity to offset that impact: Saudi Arabia, Russia, the United Arab Emirates and Kuwait.

A formal revision to the cartel’s oil output is expected to be proposed in 2 weeks when OPEC and its allies will meet in Vienna on June 22 and 23 to discuss their production policy for the second half of the year. Saudi Oil Minister Khalid Al-Falih last month said the kingdom shared the “anxiety” of consuming nations about high oil prices and added that OPEC and its allies were “likely” to boost output, undoing nearly 2 years of “progress” following the Vienna oil output deal which cut 1.6 mmb/d from world production in an attempt to eliminate the record inventory overhang, and nearly doubling the price of oil from $45/barrell to $80.

As Bloomberg concludes, the most recent comments by Trump and the request for extra oil are among the most forceful U.S. intervention in OPEC affairs since Bill Richardson, the energy secretary during the second administration of Bill Clinton, phoned the Saudi minister in the middle of an OPEC meeting in 2000 asking for a production increase.

The intervention enraged other members of the cartel, exacerbating a schism between Saudi Arabia and Iran. This time around, it appears that Trump’s peculiar brand of diplomacy may have achieved its goal without angering anyone.

zerohedge



146 Comments on "Trump Asked Saudi Arabia To Boost Oil Production By 1 Million Barrels Per Day"

  1. JuanP on Tue, 5th Jun 2018 5:17 pm 

    MM, It is OK to change your mind, it proves you are smart and learning, if you stuck to your old ideas you wouldn’t be, so be proud of it.

  2. MASTERMIND on Tue, 5th Jun 2018 5:33 pm 

    The End of the Oil Age is Imminent!

    Recently, the HSBC oil report stated that 80% of conventional oil fields were declining at a rate of 5-7% per year. This means that there will be an oil shortage of ~30 million barrels per day by 2030 and ~40 million barrels per day by 2040.
    http://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017

    What is mentioned far less often is that annual oil discoveries have lagged annual production since the 1980s.
    https://imgur.com/a/6dEDt

    Now, this problem has nothing to do with the recent decline in the oil price, which started in 2014. This has been an on-going problem for the past 30 years. Now, the IEA is predicting oil shortages by ~2020 due to declining exploration.
    https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000

    Here, the IEA blames this problem on the low oil price. But, this problem started in the 1980s. The problem is geological: we are running out of conventional cheap oil. Shale and tar sands are not the answer, either. Those resources are far too expensive, compared to conventional oil, because the global economy is based on cheap conventional oil. Expensive oil is not a replacement for cheap oil.

    Based upon the HSBC report and the IEA, the End of Oil Age will start around ~2020: there will be a dramatic economic depression due to exhaustion of cheap oil. This will cause a global economic collapse.

  3. MASTERMIND on Tue, 5th Jun 2018 5:36 pm 

    Existing oil reserves are scheduled to begin a catastrophic crash within 1 to 3 years. When it hits the economic and social damage will be catastrophic. The end of Western Civilization, from China to Europe, to the US, will not occur when oil runs out. The economic and social chaos will occur when supplies are merely reduced sufficiently….

    https://imgur.com/a/6dEDt
    https://arxiv.org/pdf/1708.03150.pdf
    https://www.scientificamerican.com/article/has-peak-oil-already-happened/
    https://www.nature.com/nature/journal/v481/n7382/full/481433a.html
    http://www.sciencedirect.com/science/article/pii/S0301421509001281
    https://www.scribd.com/document/375110698/The-end-of-Peak-Oil-Why-this-topic-is-still-relevant-despite-recent-denials-Chapman-2014
    https://www.scribd.com/document/375110317/Projection-of-World-Fossil-Fuels-by-Country-Mohr-2015
    http://www.energybulletin.net/sites/default/files/Peak%20Oil_Study%20EN.pdf
    http://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017

  4. MASTERMIND on Tue, 5th Jun 2018 5:45 pm 

    JuanP

    The End of the Oil Age is Imminent!

    Recently, the HSBC oil report stated that 80% of conventional oil fields were declining at a rate of 5-7% per year. This means that there will be an oil shortage of ~30 million barrels per day by 2030 and ~40 million barrels per day by 2040.
    http://www.scribd.com/document/367688629/HSBC-Peak-Oil-Report-2017

    What is mentioned far less often is that annual oil discoveries have lagged annual production since the 1980s.
    https://imgur.com/a/6dEDt

    Now, this problem has nothing to do with the recent decline in the oil price, which started in 2014. This has been an on-going problem for the past 30 years. Now, the IEA is predicting oil shortages by ~2020 due to declining exploration.
    https://www.wsj.com/articles/iea-says-global-oil-discoveries-at-record-low-in-2016-1493244000

    Here, the IEA blames this problem on the low oil price. But, this problem started in the 1980s. The problem is geological: we are running out of conventional cheap oil. Shale and tar sands are not the answer, either. Those resources are far too expensive, compared to conventional oil, because the global economy is based on cheap conventional oil. Expensive oil is not a replacement for cheap oil.

    Based upon the HSBC report and the IEA, the End of Oil Age will start around ~2020: there will be a dramatic economic depression due to exhaustion of cheap oil. This will cause a global economic collapse.

  5. MASTERMIND on Tue, 5th Jun 2018 5:48 pm 

    Survivalism is an undiluted cocktail of solipsism and fear. Its adherents are — undoubtedly — bananas..

  6. MASTERMIND on Tue, 5th Jun 2018 5:49 pm 

    Anytime humanity tries to extend itself beyond the bounds of the net energy available to it, it undergoes a “correction”. The same goes for every other organism on the earth.

    Eventually, it will experience a collapse when the energy “in reserve” is not enough to sustain it.

  7. MASTERMIND on Tue, 5th Jun 2018 5:52 pm 

    My Prediction

    Financial catastrophe resulting from resource depletion and a debasement of value of fiat currencies. Then a 3-month window of tyranny and government lockdown on citizens, followed by a 3-month window of absolute carnage and death. Then, a period of about 6 months of slow die-off and that’s pretty much that. Oh, and starting sometime within the next 5 years or so..

    https://imgur.com/a/pYxKa

  8. MASTERMIND on Tue, 5th Jun 2018 6:01 pm 

    My message to the one percent!

    There’s a storm coming Mr Wayne..

    https://www.youtube.com/watch?v=q3CLc0IGstk

  9. JuanP on Tue, 5th Jun 2018 6:11 pm 

    MM “Financial catastrophe resulting from resource depletion and a debasement of value of fiat currencies. Then a 3-month window of tyranny and government lockdown on citizens, followed by a 3-month window of absolute carnage and death. Then, a period of about 6 months of slow die-off and that’s pretty much that. Oh, and starting sometime within the next 5 years or so..” That sounds really bad. Maybe you should make plans to leave the USA before it happens!

  10. MASTERMIND on Tue, 5th Jun 2018 6:20 pm 

    I’m waking up to ash and dust
    I wipe my brow and I sweat my rust
    I’m breathing in the chemicals
    [Inhale, exhale]

    I’m breaking in, shaping up, then checking out on the prison bus

    This is it, the apocalypse
    Whoa oh

    I’m waking up, I feel it in my bones
    Enough to make my system blow
    Welcome to the new age, to the new age
    Welcome to the new age, to the new age

    https://www.youtube.com/watch?v=iO_WxYC34eM

  11. GregT on Tue, 5th Jun 2018 7:36 pm 

    The only scientist that I am aware of, who predicts near term human extinction would be Guy McPherson, and his take is that humans are going away because of the burning of fossil fuels, not a shortage of them.

  12. Boat on Tue, 5th Jun 2018 7:49 pm 

    Clog

    One of the great achievements of the NWO is the reduction of sulfer in bunker fuels. Almost every nation in the world agreed.Fighting pollution is going mainstream.

  13. MASTERMIND on Tue, 5th Jun 2018 7:54 pm 

    Humans are very good at propping up the unsustainable..And this often results in a fast and unexpected collapse..(Tainter 1988)

  14. GregT on Tue, 5th Jun 2018 8:04 pm 

    Collapse is a process MM, not a moment in time. It also means different things to different people. Billions around the world already live in conditions that you would consider like your world in a collapse scenario.

  15. MASTERMIND on Tue, 5th Jun 2018 8:17 pm 

    Greg

    A collapse is rapid..Think world trade centers..

    Don’t cry because it’s over. Smile because it happened. -Dr. Seuss

  16. MASTERMIND on Tue, 5th Jun 2018 8:30 pm 

    Greg

    Angels on the sideline,
    Baffled and confused.
    Father blessed them all with reason.
    And this is what they choose.
    And this is what they choose…

    https://www.youtube.com/watch?v=fj-10lIrboM

  17. MASTERMIND on Tue, 5th Jun 2018 8:36 pm 

    Greg

    The global and OECD economies have been contracting for four decades..and soon they will collapse..end of story..And fuck your feelings..Grow some balls..oh wait you dodged the draft so that means you have none..

  18. GregT on Tue, 5th Jun 2018 9:07 pm 

    “A collapse is rapid..Think world trade centers..”

    A collapse of a structure is very different from the collapse of a system MM, but in both cases something new emerges from the rubble.

    The sooner that mankind stops destroying the natural environment in the pursuit of disposable materialistic consumer crap that he does not need, the better for the future of all life on this planet.

  19. GregT on Tue, 5th Jun 2018 9:09 pm 

    And MM, I happen to agree with most of the articles that you keep linking ( ad nauseum ), that do not agree with you.

  20. MASTERMIND on Tue, 5th Jun 2018 9:13 pm 

    Greg

    Go right ahead and stop using your computer and go live in the jungle if you want..Otherwise stop trying to guilt others..

  21. MASTERMIND on Tue, 5th Jun 2018 9:16 pm 

    Greg

    Nasa-funded study: industrial civilisation headed for ‘irreversible collapse’?

    https://www.theguardian.com/environment/earth-insight/2014/mar/14/nasa-civilisation-irreversible-collapse-study-scientists

    Limits to Growth was right. New research shows we’re nearing collapse
    https://www.theguardian.com/commentisfree/2014/sep/02/limits-to-growth-was-right-new-research-shows-were-nearing-collapse

    Mathematical historian predicts collapse of civilization in 2020s
    https://www.aol.com/article/news/2017/01/05/mathematical-historian-predicts-collapse-of-civilization-in-2020/21648520/

    Oh look Greg..The headlines I used came from the media..I bet they are all wrong as well..And a doomie uneducated prepper like you is right though..

  22. MASTERMIND on Tue, 5th Jun 2018 9:21 pm 

    Greg

    ThOsE StUdIeS dOn’T sAy wHaT yOu sAY mM..

  23. GregT on Tue, 5th Jun 2018 9:21 pm 

    I have little doubt that at some point in the future complex systems will collapse MM. I’m planning for that scenario. In the meantime, I will continue to enjoy them for as long as they last.

    I don’t live in the jungle, I live in a rainforest, and if you’re feeling guilty, you should consider speaking with a psychologist. Nobody else has any control over your feelings other than yourself.

  24. MASTERMIND on Tue, 5th Jun 2018 9:27 pm 

    “The easiest thing of all is to deceive oneself; for we believe whatever we want to believe.”

    —DEMOSTHENES

  25. MASTERMIND on Tue, 5th Jun 2018 9:28 pm 

    I dont blame my baby boomer parents for the collapse. They’re just brainwashed. Old people seem to have completely bought into propaganda. They just repeat things from cable news verbatim without thinking.

  26. GregT on Tue, 5th Jun 2018 9:31 pm 

    “ThOsE StUdIeS dOn’T sAy wHaT yOu sAY mM..”

    I’d be heading to the local dollar store if I was you, and soon MM.

    http://www.cbc.ca/news/canada/british-columbia/1-25-fentanyl-test-kits-for-sale-at-dtes-dollar-store-1.4690564

  27. Boat on Tue, 5th Jun 2018 9:32 pm 

    Mm

    Repeat after me. The crisis of today is the joke of tomorrow.

  28. GregT on Tue, 5th Jun 2018 9:34 pm 

    “They just repeat things from cable news verbatim without thinking.”

    Well at least they don’t continuously link to articles on internet discussion forums, that don’t support the conclusions that they have come to.

    That would be even more dysfunctional.

  29. MASTERMIND on Tue, 5th Jun 2018 9:35 pm 

    The economy isn’t great, it’s not even good- unless you’re a member of the top 10%, or even better the top tenth of one percent. That doesn’t seem like a fair deal..The truth is that the American People are being systematically lied to. About our economy, about our prospects, about our future..

  30. GregT on Tue, 5th Jun 2018 9:39 pm 

    “The economy isn’t great, it’s not even good- unless you’re a member of the top 10%, or even better the top tenth of one percent. That doesn’t seem like a fair deal..The truth is that the American People are being systematically lied to. About our economy, about our prospects, about our future..”

    Welcome to reality MM.

    Some things never change……

  31. MASTERMIND on Tue, 5th Jun 2018 9:42 pm 

    Greg

    Survivalism is an undiluted cocktail of solipsism and fear. Its adherents are — undoubtedly — bananas..

    too stupid to realize you are outnumbered by a million to one..Pure insanity..

  32. GregT on Tue, 5th Jun 2018 9:57 pm 

    Circular arguments MM. I’ve come to the conclusion that you’re an extremely slow learner.

  33. Bloomer on Tue, 5th Jun 2018 10:12 pm 

    The Saudis did already open the oil spigots and have since tapered back. The question remains how much oil do they have left in the ground, as every developed oil field will eventually slide into decline.

    Once Saudi Arabia loses its ability to maintain its current oil production nevermind increasing it, the Global economy will be turned on its head.

  34. GregT on Tue, 5th Jun 2018 10:17 pm 

    “Once Saudi Arabia loses its ability to maintain its current oil production nevermind increasing it, the Global economy will be turned on its head.”

    The global economy has already been turned on it’s head Bloomer, when SA goes into decline it will roll over and die.

  35. MASTERMIND on Tue, 5th Jun 2018 10:21 pm 

    Bloomer

    Once Saudi Arabia loses its ability to maintain its current oil production nevermind increasing it, the Global economy will be turned on its head.

    Anyone seen Plan B laying around?

  36. MASTERMIND on Tue, 5th Jun 2018 10:25 pm 

    Saudi Arabian oil reserves are overstated by 40% – Wikileaks
    https://www.theguardian.com/business/2011/feb/08/saudi-oil-reserves-overstated-wikileaks

    Saudi Arabia ‘may run out of oil to export by 2030’
    https://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/9523903/Saudis-may-run-out-of-oil-to-export-by-2030.html

    The collapse of Saudi Arabia is inevitable
    http://www.middleeasteye.net/columns/collapse-saudi-arabia-inevitable-1895380679

    That last article that has a peer reviewed study done that concludes peak SA and OPEC around 2026..

  37. MASTERMIND on Tue, 5th Jun 2018 10:26 pm 

    Soon MBS will the king of the worlds largest kitty litter box..

  38. GregT on Tue, 5th Jun 2018 10:51 pm 

    “Anyone seen Plan B laying around?”

    If you think that somebody else is going to come up with a plan B for you MM, you are setting yourself up for an epic fail.

  39. GregT on Tue, 5th Jun 2018 10:59 pm 

    “That last article that has a peer reviewed study done that concludes peak SA and OPEC around 2026..”

    Too late in the game to stop a runaway greenhouse event. Let’s all hope that the global economy crashes before then.

  40. GregT on Tue, 5th Jun 2018 11:10 pm 

    From one of your links MM, that you have provided likely over 100 times already. Do you even bother to read your links?

    World Scientists’ Warning to Humanity: A Second Notice

    Twenty-five years ago, the Union of Concerned Scientists and more than 1700 independent scientists, including the majority of living Nobel laureates in the sciences, penned the 1992 “World Scientists’ Warning to Humanity”.

    These concerned professionals called on humankind to curtail environmental destruction and cautioned that “a great change in our stewardship of the Earth and the life on it is required, if vast human misery is to be avoided.” In their manifesto, they showed that humans were on a collision course with the natural world. They expressed concern about current, impending, or potential damage on planet Earth involving ozone depletion, freshwater availability, marine life depletion, ocean dead zones, forest loss, biodiversity destruction, climate change, and continued human population growth. They proclaimed that fundamental changes were urgently needed to avoid the consequences our present course would bring.”

    “They implored that we cut greenhouse gas (GHG) emissions and phase out fossil fuels, reduce deforestation, and reverse the trend of collapsing biodiversity.”

    “On the twenty-fifth anniversary of their call, we look back at their warning and evaluate the human response by exploring available time-series data.

    Since 1992, with the exception of stabilizing the stratospheric ozone layer, humanity has failed to make sufficient progress in generally solving these foreseen environmental challenges, and alarmingly, most of them are getting far worse.

    Especially troubling is the current trajectory of potentially catastrophic climate change due to rising GHGs from burning fossil fuels (Hansen et al. 2013), deforestation (Keenan et al. 2015), and agricultural production—particularly from farming ruminants for meat consumption (Ripple et al. 2014).”

  41. GregT on Tue, 5th Jun 2018 11:12 pm 

    https://academic.oup.com/bioscience/article/67/12/1026/4605229

  42. deadly on Tue, 5th Jun 2018 11:19 pm 

    Anybody seen any UFOs lately? lol

    I haven’t seen any, just some satellites soaring above the earth spying on everything out there.

    China now imports 8.2 million bpd, more than the US and the largest oil buyer in the world.

    Not too long ago, it was 6 million bpd imported.

    Got to have an increase of one million per day, China is voraciously gobbling crude oil in copious amounts conehead style.

    Saudi Arabia has to supply more oil to China, China cut the amount of oil from Saudi Arabia by forty percent and went to the spot market to make up the difference. Oil tankers bumping up against each other making a beeline to China with a boatload of oil.

    Trump, the bozo on the bus, wants China to buy Saudi oil and not extend cuts.

    All of the bluster behind the trade war begins and ends with oil.

    It’s always about oil, no oil, the well-oiled oil economy grinds to a screeching halt.

    I suppose Trump can have something to say, but the oil market is going to work without Trump’s input.

    China can cancel sales of Saudi oil and that sends a shockwave across the market, a force to be reckoned with, as they say.

  43. GregT on Tue, 5th Jun 2018 11:34 pm 

    “Got to have an increase of one million per day, China is voraciously gobbling crude oil in copious amounts conehead style.”

    China is gobbling up oil in order to manufacture consumer crap for the West. Solution? Stop buying Chinese manufactured consumer crap.

    Of course that would unfortunately cause the collapse of our predominately retail based economies.

    Decisions, decisions.

  44. Cloggie on Tue, 5th Jun 2018 11:42 pm 

    Its not BS..

    The World and OECD economies (GDP) have been contracting for four decades

    Source: World Bank
    https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?locati

    Your own WB data shows that economic GROWTH has been contracting over the past 4 decades, not GDP, you dummy.

  45. Cloggie on Tue, 5th Jun 2018 11:54 pm 

    The car is one of the main scourges of humanity. How to get rid of it? Ride-sharing is a step, that is one engine per 7 seats, hopefully occupied:

    https://www.youtube.com/watch?v=y2X1ehdJQSI

    But Estonia goes one step further: free public transport:

    https://www.huffingtonpost.com/entry/estonia-free-public-transportation-tallinn-paris-germany_us_5b0e7519e4b0802d69cfecaf

    Nice song from Estonia: https://www.youtube.com/watch?v=4vq3GFVeVE8

  46. MASTERMIND on Tue, 5th Jun 2018 11:59 pm 

    Clogg

    GDP is economic growth..

    Detroit, Greece, Puerto Rico, Venezuela, Italy next and then Europe as a region..

  47. GregT on Wed, 6th Jun 2018 12:03 am 

    “Survivalism is an undiluted cocktail of solipsism and fear. Its adherents are — undoubtedly — bananas..”

    Survivalism could otherwise be referred to as natural selection MM, also commonly called Darwinism.

    Your ancestors obviously rose to the occasion, or you wouldn’t be here. Judging from your comments, you would be the dead end of your own personal genealogy.

  48. MASTERMIND on Wed, 6th Jun 2018 12:10 am 

    Polls now show clear majority for Remain. Especially the young – the very people whose future is at stake. The Brexit fanatics are now running scared their lollipop is going to be taken away. Scare them some more on the march in London, June 23rd.

    -Richard Dawkins

    https://twitter.com/RichardDawkins

  49. GregT on Wed, 6th Jun 2018 12:28 am 

    “GDP is economic growth..”

    By continuing to post extremely stupid comments MM, you are lending nothing to your credibility, which BTW, is already pretty much at zero.

  50. Bloomer on Wed, 6th Jun 2018 12:41 am 

    Great links MM and Clogs thank-you for that. GregT with the demise of collectivism, humanities ability to resolve global problems has diminished.

    Rugged individualism has won the day and as a result we will all together be flushed down the pooper.

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