Complex Made Simple

Trump is not crazy: He is strong arming both Saudi and Russia with oil muscle

The only thing unstable or insane about Trump is p[erhaps his hairdo, and as far as his Middle East business policies, he is saner than ever.

Just last summer he completed a $350bn arms deal with Saudi, New York is getting ready to host part of the $100bn IPO of 5% shares of the $2trn Saudi Aramco company, and recently he launched the biggest offshore oil exploration program aimed at taking Saudi oil dominance out of the picture, replacing it wit the US and taking credit for it, as usual.

Statista data journalist Martin Armstrong, said that according to a recent forecast, the U.S. is set to become the world’s biggest oil producer in 2018, surpassing Russia and Saudi Arabia.

How is he going to do that?

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This graph is courtesy of Statista (

US Offshore plans are on

Statista’s study showed that under the Trump administration, the country is intent on a new plan just announced for 2019, opening up over 90% of U.S. offshore territory to oil and gas drilling.

traditonally, Russia produces some 10.5 million barrels per day (mbd), Saudi some 9.77mbd and the US around 9.55mbd.

The US is on path to reach and cross the 10mbd this year.
According to, the Trump administration just proposed the most ambitious offshore drilling plan aimed at investigating the Arctic, Atlantic and Pacific Oceans for oil, and exploring parts of the Gulf of Mexico.

The five-year drilling plan from the Department of Interior for 2019-2022, calls for 47 lease sales of more than 90% of the entire U.S. outer continental shelf.

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“ The administration believes the proposed territory holds some 90 billion barrels of oil and 319 trillion cubic feet of natural gas, or reserves that are about 80 percent larger than is currently available,” said

“Under President Trump, we are going to become the strongest energy superpower this world has ever known,” Interior Secretary Ryan Zinke told reporters.

Oil stagnating   

Reuters reported that oil prices were stable on Monday, supported by a slight decline in the number of U.S. rigs drilling for new production which eased by five in the week to Jan. 5 to 742.

US WTI crude futures were at $61.50 a barrel, below last week’s $62.21 while Brent crude futures were at $67.66 a barrel, also below a high of $68.27 last week, according to Reuters.

“Despite this, U.S. production is expected to break through 10 million barrels per day (bpd) very soon, largely thanks to soaring output from shale drillers,” said Reuters.

This goes counter to OPEC measures aimed at cutting production some 1.8mbd until end 2018.

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Oil price comeback to halt?

CNBC reported that energy expert Tom Kloza, who correctly called 2015’s oil collapse, is arguing crude’s comeback is on borrowed time.

“This is not going to be a … year with $70-plus per barrel for any stretch of time,” the firm’s global head of energy analysis said recently on CNBC’s “Futures Now.”

Over the past six months, WTI rose by 36% while Brent’s was a 41% increase.

He predicts both WTI and Brent prices will average in the $50 range this year with the biggest drop likely happening toward spring.

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Saudi slashes oil export prices

Saudi Aramco has cut the price of Arab Light for the U.S. market further for February despite shipping record-low amounts to its biggest customer,” said

“U.S. refiners will receive Arab Light for $0.10 less a barrel, at just $0.90 above the benchmark for the Gulf Coast.”

According to the oil site, Saudis said they would raise the official selling prices (OSPs) for Asian customers for January, on the back of a stronger Dubai benchmark and solid demand.

As part of efforts to help reduce global supply, Saudi exports to the US have been falling steadily since August 2016, to a low of 415,000 barrels per day in the week to October 27, 2017, according to data from the Energy Information Administration.

“In early December, also as part of this plan, Energy Minister Khalid al-Falih said that Saudi Arabia would cut its crude oil exports to Asia by more than 100,000 bpd in January compared to December,” said