It will be interesting to see what the Trump administration will do in regards to oil and OPEC. Trump is a hater of all things middle eastern, and all “bad deals”. Obama lifting the sanctions on Iran qualifies as both. Leading up to the election Trump was outspoken against that deal, as is the Republican party as a whole. So it would make sense for Trump to reverse it and put the sanctions back. It’s no skin off his nose, and he gets to both spite Obama and win praise from congress. It would also take millions of barrels of production per day out of the market which would significantly boost the price of oil and make a lot of US petroleum companies happy. It seems like a no brainer. The fallout of that deal would be interesting to see. The Sauds would be thrilled. It would both boost the price and oil and reduce Iran’s clout in the region. While also allowing OPEC to flatten their production numbers without Saudi Arabia or Iraq being forced to cut their production. It would mess with Russia and their aspirations in the region. Russia has been making large investments into the Iran. However it would push the Iranians further under Russia’s umbrella strengthening Russia’s alliances in the region. The Chinese would be put in an interesting position. They have been purchasing as much cheap oil as possible to build their reserves and offset the continuing decline of their domestic production. As the largest importer of oil and exporter of manufactured goods, this period of cheap oil is helping them immensely. However as much as they can threaten to cut off the US supply of iphones, they are terrified of getting on the wrong side of Trump. They know he can and will sanction the hell out of them, even if it will hurt the US more. So with renewed US sanctions they will have to avoid Iranian oil completely. We will have to wait and see when happens when Trump is finally able to put pen to legislation.
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