Oil Wars

As I wrote previously, Saudi Arabia increased the price of oil being sold to the US market.

Some hypothesize this is in deference to Trump stating he may impose a higher tariff on oil imported to the US. It would make sense for them to do this, making a higher profit rather than having the price of their oil sold in the US, rather than have a tariff imposed, increasing the price while they get nothing additional in the bargain.

If you noticed that gas had been trending lower in price and then essentially froze, this explains that.

Meanwhile, the price of oil has continued declining on the international market, with Brent back below $30 a barrel, currently at $28.28. WTI crude is below $20 again, now at $19.71 a barrel. The decline continues even as production has decreased further, including in the US and we have seen the first of US producers declaring bankruptcy and banks considering seizing assets of oil companies in deep debt while interest free loans dry up and payments fall behind.

However, SA increasing oil prices to the US may not stop Trump from increasing tariffs on imported oil. He may well do exactly that due to the decline in US oil production to force increased domestic sales of domestic oil. Oil industry lobbyists have been pushing for him to do exactly that.

These people have no idea what the repercussions of this would be. In my last post regarding the oil decline I detailed my own fantasy and warnings about the collapse of the petrodollar. Of course, this has both good and…