Russian discontent over Saudi intentions to reduce production is a likely potential flashpoint for the upcoming meeting—but internal OPEC politics, particularly between Saudi Arabia and Iran, mean this summit is rife with tension that threatens to upset proceedings.
The oil price increase sparked by the recent attacks on Saudi oil tankers is concerning for the United States, because oil is the lifeblood of the American economy.
A series of apparent attacks on oil infrastructure in the Arabian Peninsula thrusted geopolitical risk to the forefront of market concerns. Against a backdrop of an already tightening supply-demand balance, the possibility of a serious supply outage poses a major risk to market stability.
Between Iran, Libya and Venezuela, the seeds of a major disruption to the oil market have already been sown. A significant outage in one could push the market into deficit.
The U.S. State Department announced on April 22 that it would let all Iran sanctions waivers expire at the beginning of May as part of the Trump administration’s “maximum pressure” campaign on Iran.
The oil market’s immediate reaction to the White House's announcement to not reissue Iranian oil waivers underlines the fact that oil prices and world politics are inextricably linked
With the expiration of the waivers now just a little more than two weeks away, the oil market is on edge as the White House weighs its next steps.
For the United States to realize its foreign policy ambitions, domestic oil demand must be reduced.
President Trump's latest OPEC tweet has heightened speculation that volatility is returning to the global oil market. But the truth is oil volatility never went away.
The U.S. government's goal to knock Iran oil exports down to zero may be boxed in by its own policy towards Venezuela.