Trump presses oil executives.... again

[Belk]

That's a great question - but we all know that as supply increases prices go down.

If the American supply is not increasing it will not lower prices.

 

[Zaha Torte]

Probably not, no. Increased drilling may boost a particular company’s bottom line, but it’s unlikely to make much of a dent in the global oil market where prices are set. And if it impacts prices too much, OPEC is liable to close their spigots to keep prices up.

How does OPEC affect US oil production and distribution?

 

[Pommer]

How does OPEC affect US oil production and distribution?

The oil from the United States is part of the world oil market.
We could, as “public policy” make it so that we stop exporting oil like we had done from 1973-2015, but that’d kill the nation’s oil industry since we’d never use as much as they’re currently extracting and prices would plummet.

The “high” prices for our petrol can be seen on the oil comapnies’ balance sheets as they continue to rake in the profits, (while they can).
(I’m paying about $3.49 at Sam’s/Costco in PA, which runs high as we have a gasoline tax of 58¢/gal [and roads which look like we’re paying a dime], the highest in the Land!)

OPEC can easily cause a recession in the USA and are generally cautious about trying to actively avoid such actions since they too would take a hit.

 

[iluvatar5150]

How does OPEC affect US oil production and distribution?

OPEC has more than enough leverage to affect global oil prices. US companies adjust their production in response to global oil prices.

 

[Zaha Torte]

The oil from the United States is part of the world oil market.
We could, as “public policy” make it so that we stop exporting oil like we had done from 1973-2015, but that’d kill the nation’s oil industry since we’d never use as much as they’re currently extracting and prices would plummet.

The “high” prices for our petrol can be seen on the oil comapnies’ balance sheets as they continue to rake in the profits, (while they can).
(I’m paying about $3.49 at Sam’s/Costco in PA, which runs high as we have a gasoline tax of 58¢/gal [and roads which look like we’re paying a dime], the highest in the Land!)

OPEC can easily cause a recession in the USA and are generally cautious about trying to actively avoid such actions since they too would take a hit.

If we are independently drilling our own oil - enough to supply ourselves and export - how can OPEC cause a recession in the US?

 

[iluvatar5150]

If we are independently drilling our own oil - enough to supply ourselves and export - how can OPEC cause a recession in the US?

“Oil” isn’t just “oil.” There are different kinds of oil that are better suited to refining into different kinds of products. And there are already supply chains in place that make it more economical to transport that oil and those petroleum products to certain places rather than others. One purely hypothetical example is that it could make more sense to take crude drilled in Texas and ship it out of the gulf to western Africa than it would to truck it to California. Another hypothetical is that the kind of crude common in the US is better suited for industrial processes in China whereas the kind of oil we need for transportation is what gets drilled in Saudi Arabia.

I don’t know if these specifics are accurate, but that’s the idea.

OPEC is a big enough player that they could seriously disrupt our oil industry if they wanted.

 

[essentialsaltes]

Trump just made more promises to oil industry campaign donors​

In a rambling fundraising pitch to oil executives in Houston on Wednesday, former president Donald Trump promised them that he would immediately approve their projects and expand drilling in a second term

Trump suggests to oil donors he will fast-track their merger deals​

The ex-president’s pledge to the fossil fuel industry is the latest to emerge from a closed-door fundraising meeting.

Former president Donald Trump suggested to oil executive donors this month that he could ease the Federal Trade Commission’s scrutiny of their industry’s mergers and acquisitions if he returns to the White House, according to five people familiar with the matter.

During a fundraiser in Houston on May 22, oil executives complained that the FTC has taken too long to approve deals and has requested too much information. Occidental Petroleum CEO Vicki Hollub [complained]

Trump expressed dismay that the federal government had probed her phone for information and vowed that his administration would treat her differently if he won the presidency

“Can you just wait a few months?” he said, according to these individuals.

Trump’s remarks, which have not previously been reported, indicated that he may try to influence the FTC, an independent agency, on behalf of his supporters.

The FTC has long operated on the principle that it should be a neutral arbiter, indifferent to whether a company or industry is favored by the current president. Its core mission is to prevent business practices that are anticompetitive, deceptive or unfair to consumers. Though its five commissioners are nominated by the president, no more than three can be of the same party.

[Trump] promised to revoke California’s waiver under the Clean Air Act, which allows the state to set tougher emissions limits for passenger cars than those of the federal government.

Trump also vowed to shift the focus of the International Energy Agency, the world’s top energy watchdog, from combating climate change to boosting fossil fuels.

--

We all rely on the FTC and all the other agencies to be staffed by career people who do their jobs to follow the law and not the corrupt whims of the chief executive. I'm thinking also of Trump's previous attempt to reclassify career civil servants so that he could fire them if they did something he disapproved of. Fortunately, that power grab came late in his presidency.

Trump Executive Order turns many civil servants into at-will fireable employees​

 

[helmut]

That's a great question - but we all know that as supply increases prices go down.

Only if offering this supply is cheap enough to let the prices go down.

But there is no evidence that drilling in a polar region, with pipelines that break every month because of climate change (or, alternatively, need some billions to build a construction stable even in melting permafrost) will allow prices to go down.

 

[helmut]

This makes the Arctic an incredibly rich area. It is about the same geographic size as the African continent - about 6% of Earth's surface area - yet it holds an estimated 22 percent of Earth's oil and natural gas resource.​

Almost half of these 6% area belong to Russia, the next big part belongs to Canada, then I#m not sure whether USA (Alaska) or Denmark (Greenland) has the third place. If you are less lazy than me, you can look it up, e.g. on Wikipedia.

That kind of 'gas'

it is expensive to get it, perhaps there will be drilling when prices are rising. It is rather unlikely that there will be much drilling if the big companies fear the prices might go down.

 

[rambot]

If we are independently drilling our own oil - enough to supply ourselves and export

You don't and you never have.

 

[Zaha Torte]

You don't and you never have.

It should be the goal.

 

[rambot]

It should be the goal.

Not possible.

You don't have enough differing types of oil to make all the fossil fuel products you need.

 

[helmut]

Zaha Torte said:​

​

It should be the goal.​

Not possible.
You don't have enough differing types of oil to make all the fossil fuel products you need.

If we compare the fossil oil consumption of the USA with other countries: Can we honestly say that the USA needs that much, or is it pure wasting of resources?

Smaller cars, better insulation of houses etc. could reduce much.

 

[Zaha Torte]

If we compare the fossil oil consumption of the USA with other countries: Can we honestly say that the USA needs that much, or is it pure wasting of resources?

Smaller cars, better insulation of houses etc. could reduce much.

We could always export the excess.

 

[Gene2memE]

How does OPEC affect US oil production and distribution?

OPEC produces about 40% to 45% of global liquid fuels, and has a more than 50% share of global crude oil exports. So, any changes to output at OPEC has a huge impact on global oil markets. Which in turn has a huge impact on the US oil market - because the US is the world's largest consumer of crude oil.

US also imports from OPEC about 900,000 to 1.3 million barrels of crude oil per day, against consumption (both use and refining for export) of about 6.2 to 6.9 million barrels per day.

So, OPEC has a direct influence on roughly 13% to 21% of the US oil market and an indirect influence on substantially more than that.

 

[Gene2memE]

We could always export the excess.

The US does.

The US has been an exporter of refined petrochemical products since 2011. The US has been a net exporter of petroleum fuels (oil and natural gas products) since 2020. In 2023, there was a record surplus of exports over imports of about 1.65 million barrels per day.

Theoretically, the US could produce enough oil to satisfy domestic demand. But it would be very expensive and very difficult. The US would need to sink a lot of new wells, and it would need to expand shale oil/fracking substantially.

The Saudis can reputedly pump crude for somewhere in the range of $10-20 per barrel.

The break-even for the best US conventional wells is somewhere about $35-45 per barrel. New wells are even more pricey, about $60-70 per barrel once start-up costs are factored in. Shale oil is even more expensive. Existing wells break even at about $45-55 per barrel. New wells are ~$60-80 per barrel.

The upshot is that if the US were to satisfy its own demand, the price at the pump would go up anywhere from 25% to 40% per gallon.

 

[helmut]

We could always export the excess.

Which excess?