218
has yet confirmed this, but if agreed, world oil production will be reduced by about
15 million barrels per day (www.reuters.com 2020a, b, c, d, e, f, g, h, i).
Iran has also stated that it opposes any meeting that lacks a clear agenda on the
state of the energy market, and called for a reduction in global oil production and
supply by all oil producers. For Iran, this is only possible if the United States and
Canada also reduce their oil production. The US Department of Energy has
announced that without US intervention, US oil production has declined. However,
what Iran, Russia, and Saudi Arabia want is a precise determination of the amount
of production reduction by all producing countries. It should be noted that the
reduction in oil production does not include Iran. Iran’s oil production has fallen
sharply due to unilateral US sanctions. Following a meeting on Thursday (April 9,
2020), Iran’s oil minister announced the decision of OPEC Plus leaders on how to
schedule a 2-year reduction in oil production, calling it one of the “unprecedented
figures in OPEC and non-OPEC production” (www.tehrantimes.com 2020).
The collapse in demand has also led to the closure of refineries around the world,
from South Africa to Canada, due to the rapid spread of the Coronavirus, and has
intensified market saturation. As a result of the OPEC Plus agreement, although
initially met with a positive reaction and rising prices, crude oil prices fell again.
The growth of oil supply has caused the global price of a barrel of Brent North Sea
crude oil to fall from about $69 during trade on January 6, 2020, to $31 during trade
on Thursday (April 9, 2020) (www.reuters.com 2020a, b, c, d, e, f, g, h, i). During
the Covid-19 pandemic, both the media and the US government have mainly been
dwelling on oil. However, it would be wiser of them to look into the natural gas
markets, specifically in the effects of the potential reductions in the US LNG exports
on the geopolitical arena. A decrease in US LNG exports could have serious consequences for the US and its allies. On the other hand, there are some developments
that are significant of benefit for the geopolitics of the US. Two examples of these
developments are Turkey’s discontinuance in importing from Iran, and the completion of the offshore component of the Southern Gas Corridor. Hence, developments
in pipeline supply movements should be continuously monitored and supported by
US government agencies (www.fdd.org 2020a, b, c, d, e).
The Effects of the “Oil War” on the Shale Oil
According to official figures released last week, US demand for oil has currently
fallen to 14.4 million barrels per day, the lowest level since 1990, more than a 30%
drop from precrisis levels in Corona. While Reuters surveys show that the price
range for various US shale oil fields is between $39 and $48, the price of a barrel of
US crude oil (West Texas Intermediate WTI Crude Oil) traded at $26 in the global
market. Earlier, Bloomberg reported that with the ending of oil storage capacity in
some US shale oil fields, the price of surplus oil has dropped below zero and producers intend to pay to persuade applicants to transport oil. At the same time, the
latest report from the US Energy Information Administration (EIA) shows that in
6 Trump Energy Diplomacy
has yet confirmed this, but if agreed, world oil production will be reduced by about
15 million barrels per day (www.reuters.com 2020a, b, c, d, e, f, g, h, i).
Iran has also stated that it opposes any meeting that lacks a clear agenda on the
state of the energy market, and called for a reduction in global oil production and
supply by all oil producers. For Iran, this is only possible if the United States and
Canada also reduce their oil production. The US Department of Energy has
announced that without US intervention, US oil production has declined. However,
what Iran, Russia, and Saudi Arabia want is a precise determination of the amount
of production reduction by all producing countries. It should be noted that the
reduction in oil production does not include Iran. Iran’s oil production has fallen
sharply due to unilateral US sanctions. Following a meeting on Thursday (April 9,
2020), Iran’s oil minister announced the decision of OPEC Plus leaders on how to
schedule a 2-year reduction in oil production, calling it one of the “unprecedented
figures in OPEC and non-OPEC production” (www.tehrantimes.com 2020).
The collapse in demand has also led to the closure of refineries around the world,
from South Africa to Canada, due to the rapid spread of the Coronavirus, and has
intensified market saturation. As a result of the OPEC Plus agreement, although
initially met with a positive reaction and rising prices, crude oil prices fell again.
The growth of oil supply has caused the global price of a barrel of Brent North Sea
crude oil to fall from about $69 during trade on January 6, 2020, to $31 during trade
on Thursday (April 9, 2020) (www.reuters.com 2020a, b, c, d, e, f, g, h, i). During
the Covid-19 pandemic, both the media and the US government have mainly been
dwelling on oil. However, it would be wiser of them to look into the natural gas
markets, specifically in the effects of the potential reductions in the US LNG exports
on the geopolitical arena. A decrease in US LNG exports could have serious consequences for the US and its allies. On the other hand, there are some developments
that are significant of benefit for the geopolitics of the US. Two examples of these
developments are Turkey’s discontinuance in importing from Iran, and the completion of the offshore component of the Southern Gas Corridor. Hence, developments
in pipeline supply movements should be continuously monitored and supported by
US government agencies (www.fdd.org 2020a, b, c, d, e).
The Effects of the “Oil War” on the Shale Oil
According to official figures released last week, US demand for oil has currently
fallen to 14.4 million barrels per day, the lowest level since 1990, more than a 30%
drop from precrisis levels in Corona. While Reuters surveys show that the price
range for various US shale oil fields is between $39 and $48, the price of a barrel of
US crude oil (West Texas Intermediate WTI Crude Oil) traded at $26 in the global
market. Earlier, Bloomberg reported that with the ending of oil storage capacity in
some US shale oil fields, the price of surplus oil has dropped below zero and producers intend to pay to persuade applicants to transport oil. At the same time, the
latest report from the US Energy Information Administration (EIA) shows that in
6 Trump Energy Diplomacy