Last week, Iran called on all members of the OPEC oil cartel to take unified action against the US strengthening sanctions against the Islamic Republic. A statement from President Masoud Pezeshkian, following Donald Trump’s instructions, directed major cabinet colleagues to increase Iran’s sanctions and reduce oil exports to zero. President Trump previously called for Saudi Arabia and OPEC to increase oil production and lower oil prices. So how will OPEC members respond to Iran’s calls for action and what Western strategies will handle the situation from here?
The worst-case scenario in the West is for OPEC members to ban oil exports to the US and its important allies. These members account for around 40% of global crude oil production, about 60% of total oil traded internationally from oil exports, and 80% of global proven oil reserves. OPEC was specifically mandated by the Foundation in 1960 to “adjust and unify oil policies” of all member states. An OPEC-wide embargo on oil exports to the west was previously issued when OPEC members and also Egypt, Syria and Tunisia launched embargo on oil exports to the US, UK, Japan, Canada and the Netherlands. I did. Their collective supply of weapons, intelligence resources and logistic support to Israel during the Yom Kipur War of 1973. As the global oil supply fell, oil prices rose dramatically, and with an incremental oil production by OPEC members, it was analyzed in detail in a new book on the new global oil market order. Historically around 70% is made up of oil prices, which has led to a rise in gas prices as well. By the end of the March 1974 embargo, oil prices had risen about 267%, up from about USD 3 (PB) per barrel to nearly 11p. This caused a global economic slowdown fire, especially felt in the western net oil importing countries. Why do we think the outcome of such a wide-scale embargo is not so dramatic now, at a time when it is still being readjusted to significant losses in oil and gas supply from Russia following the 2022 Ukraine invasion? there is no. Oil prices.
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That said, until very recently, there was little chance that OPEC’s major players would listen to Iran’s calls for such action. A similar request from the Islamic Republic last November imposed that Muslim OPEC members impose such an embargo. He even called for their help to lower oil prices shortly after the 2022 invasion of Ukraine, even if the princes of Saudi Arabia and the United Arab Emirates call him Even what was considered such a light empty by the major powers of Opec. Even before Donald Trump officially took office on January 20th, there was a significant softening of attitudes towards these same leaders and the rest of OPEC and its leadership position in the world. Ta. Many observers in the West were hoping for a continuation in the second presidential term of neo-separatist Trump, apparent in some important respects in his first term, but early signs are that this is the case That means there is none. Instead, Trump’s second term reinforces the world’s major influence through necessary means, as he sees its voters, to maintain his promise to “make” the voters. It seems there is a much more likely chance of checking. American Tournament.” Essentially, it is a bold reaffirmation of the original 1992 Wolfowitz Doctrine, attracting attention by major Middle Eastern powers. This was evident in the early tribute to the new president, which invested US$600 billion in the US
But at that point there was a sign that the relationship between the United States and its previous great allies in the Middle East might not be able to settle down with something comfortable that was based on the 1945 Foundation Agreement or the subsequent Trump version. I looked into my latest book on the new Global Oil Market Order. Back at the oval office, Trump revealed he wanted more money from Saudi Arabia in return for being protected from regional and global threats by the United States. “Abraham Accord”) Despite years of intense objections to this by King Salman bin Abdulaziz al-Saud of Saudi Arabia, along with Israel as soon as possible. He then reaffirmed that Saudi Arabia and OPEC hope to increase oil production and maintain it under the “Trump’s oil price range.” For key economic and political reasons analyzed in my latest book, Trump never wanted to see more than 75-80 pounds of oil at Brent levels. His plan to dramatically increase US production and promote more production from elsewhere makes him want even lower oil prices in his second term as president. it is clear. Meanwhile, the break-even oil price for Saudi Arabia’s 2025 budget is Brent at £98, according to the IMF. This difference in oil prices between the US and its allies and Saudi Arabia and its OPEC brothers is another major potential issue between the West and the Middle East.
All of these factors are cracks in this relationship, and the catalyst for the deeper cracks may have come last week with Trump’s plan to take over Gaza and resettle the 2.1 million Palestinians living there. yeah. After winning the War of Independence in 1948, ideas that would be more abominable for Arab and Islamic states than would be added to the final withdrawal of their claims against land they believe were stolen from the Palestinians by the Israeli Jewish state. It’s difficult to think about. . Trump’s additional comments that he could use his power to achieve this goal are also music to the ears of all radical Islamic militias across the Middle East, spurring more and more corn-in Iran and Russia China can still provide additional resources. as needed. Of course, in the fluid world of business negotiations that characterized Trump’s first political term, this “Gaza Gambit” may simply be the opening position towards a wider Middle East reconciliation. In this, he may try to exchange the idea of resettlement of Gaza for a more stringent new nuclear deal with Iran, which once again has Israeli support. Indeed, shortly after his announcement in Gaza, Trump posted on his true social platform his desire for a “verified nuclear peace agreement” with Iran. Such a deal would suggest that Arabs and Islamic countries in the Middle East might revoke Palestinian claims against Gaza, Israel would be strictly hampered by US inspections, and Saudi Arabia might feel the security situation has been softened sufficiently. , Iran’s nuclear ambitions may feel soft enough to sign up. Abraham is in line with Israel. In this case, the kingdom may also consider OPEC’s oil production suitable to maintain at a level below the “Trump’s oil price range.”
Simon Watkins for Oilprice.com
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