Iran is the Real Target, and US Banks See a Risk
Apparently, I have been misguided in focusing on Saudi Arabia and its oil. Trump’s real goal is to block the worldwide export of Iranian oil, as a punishment for their audacity in actually conforming to the nuclear disarmament treaty. Trump has withdrawn from the “ridiculous” Obama-Kerry treaty, and promised retaliation to any of the other countries that stay in the treaty.
Mental health note vis-a-vis the 25th Amendment: Trump has progressed from believing that he owns all American industries and businesses, to believing that he controls all World industries and businesses.
The implementation of the restrictions are on Nov. 5, one day before the midterm election. I expected some Fox News run White House October surprises, but nobody could have expected the Saudi murder, plus the Iran crises with our allies. The US gets no oil from Iran, so this is not a direct US crises.
Another costly aspect is that US banks planned to fund the progressive development of other industries in Saudi Arabia, which wasn’t occurring anyway. They also planned to handle the partial sale and public offering of Aramco, the Saudi oil company. Well, that was when oil was $40 a barrel and the Saudi’s had to borrow money. Now that oil is $80 a barrel, Saudi Arabia would be foolish to sell.
So Iran supplies 4.8% of world oil. Maybe that is easy for OPEC and even US and Canadian fracking to make up for. But the price will go up. It might be difficult for Saudi Arabia to pick up the output itself, since while it leads world oil production, it supplies 15.9% of world output, and this would be a 30% increase. In any case, on Nov. 5, Trump will enrich Saudi Arabia, despite their misdeeds.
Oct. 18 Update: for the following section, it has been determined that only $14.5 billion of military purchases are at stake. While still a lot, the President claimed that is is 7.6 times larger.
Before, Trump said that we could not risk the future of Saudi arms purchases of $110 billion, for the life of a non-citizen. Boy, that makes me feel great that as a citizen, my life is worth $110 billion! Really? I would settle for some promised action on reducing my drug prices. But today, Donald stepped that up by saying that the Saudis committed to $450 billion of total purchases from the US “probably the biggest in the history of the world” (of course). So far, it seems that only about $4 billion of the arms agreements are active.
Let’s see: the US has only 15% of Saudi imports, at $20.6 billion a year. So is Trump just promising us that they will continue their imports for the next 22 years? Or that they will double their US imports for the next 22 years? We can’t tell.
The value of Iranian oil imports in 2017 was $40.1 billion, and the yearly average oil price was $52.51 per barrel. At $80 per barrel now, the revenue is increase by 52% to $61.1 billion. 80% of Iranian exports are in oil. Their main export destinations are China 30.1%, India 16.7%, South Korea, Turkey 9.5%, and Japan 6.8%. Iran has 10% of the world’s proven oil reserves, and 15% of its gas reserves. Members of the Iranian nuclear treaty are France, Germany, the EU, Iran, the UK, China, Russia, and previously, the US.
“And the beat goes on, the beat goes on” – Cher