Can Mohammed Bin Salman Hold Power While Juggling Trump, Putin, And Oil All At Once?

by | Nov 20, 2018 | Headline News | 10 comments

Do you LOVE America?


    This article was originally published by Tyler Durden at Zero Hedge

    Increasingly, it appears that in a rerun of late 2014, OPEC has lost control of the oil market.

    According to a Bloomberg Op-Ed, Crown Prince Mohammed Bin Salman, President Donald Trump, and Vladimir Putin are the three people that will steer the outcome of oil prices in the coming year, whether higher or lower. The problem is, of course, that they all want different things.

    While OPEC spins its wheels, Saudi Arabia, Russia and the United States have control over the vast majority of global oil supply. In fact, when combined, these three countries produce more than the 15 members of OPEC put together. Right now, all are cranking out supply at record rates and it is not unfathomable to think that all three could be pushing out even more supply next year.

    As a reminder, it was Russia together with Saudi Arabia, that recently helped lead the push for the OPEC+ group to curb output restraints that had been put into place since the end of 2017. Ironically, both countries raised production to near record levels at the same time that US output soared as a result of companies in the Permian Basin finally being able to transport oil to the Gulf Coast (if not nearly all of it as many more pipelines are needed).

    These combined increases have changed the market sentiment from worries about a supply shortage to very real concerns about a glut. The sentiment changes happened over the course of the last three months, as oil prices have tumbled from almost $90 a barrel to now under $70 a barrel in short order.

    And as the scramble to offset declining prices with higher oil has re-emerged, with Saudi Arabia last week abandoning OPEC production curbs for the first time since the 2016 Vienna deal, developed nations oil stockpiles have resumed rising again and are expected to rise above their five-year average level once October data is finalized and released.

    At the same time as prices have moved lower, Saudi Arabia stated it would cut exports by 500,000 barrels a day. They also warned producers that they need to cut about 1 million barrels a day from October levels. The response from Putin and Trump to the suggestion was lukewarm at best and unceremonious at worst. Bin Salman – at least for the time being – needs revenue from oil to help continue his “transformation” of Saudi Arabia: the IMF has forecasted that Saudi Arabia needs an oil price of $73.30 a barrel next year in order to hit its budget but right now Brent is trading about $5 below that level. Output cuts seem to be the only way MBS can realize the price that he needs.

    On top of that, he will face challenges from both Trump and Putin. Neither leader is excited about restricting their respective countries’ production. Because Moscow’s budget is far less dependent on oil prices now than it was in 2016, Putin may decide that his relationship with MBS could be worth the sacrifice. However, it is anything but a guarantee at this point. Putin has publicly said that he would like oil prices around $70 a barrel also.

    President Trump is likely to be more vocal in his opposition to production cuts. It’ll come at a time when he and MBS are trying to hang onto what’s left of their political relationship in the midst of considering sanctions on Saudi Arabia as a result of the war in Yemen and the murder of journalist Jamal Khashoggi; meanwhile US consumers demand cheap gas.

    But like in 2014, the biggest threat to Saudi Arabia is the Texas oil patch. Producers in America have added significant volume over the last 12 months. In fact, just the added output this year is equivalent to the entire output of OPEC‘s Nigeria.

    The production from American producers could reach 12 million barrels a day by April, according to the Department of Energy. That is six months sooner than it was forecasting a month ago, and 1.2 million barrels a day more than estimated back in January.

    And then there is the political risk.

    President Trump stated in his Sunday morning interview with Chris Wallace that he has been briefed on an audio recording of the Jamal Khashoggi slaying, but that he was advised not to listen to the “suffering tape.”

    “Because it’s a suffering tape, it’s a terrible tape. I’ve been fully briefed on it, there’s no reason for me to hear it,” adding “I know everything that went on in the tape without having to hear it.

    You saw we put on very heavy sanctions, massive sanctions on a large group of people from Saudi Arabia,” Trump said. “But at the same time we do have an ally and I want to stick with an ally that in many ways has been very good.” Trump added that it “takes two to tango” to resolve the conflict in Yemen between Iranian-backed insurgents and Saudi-backed forces, stating “I want Saudi to stop, but I want Iran to stop also.

    And with Trump, arguably MbS’ biggest ally in the west, under growing pressure to take retaliate against the young Saudi king-in-waiting, the crown prince’s executive decision making may soon be severely curbed.

    Needless to say, MBS has a tall task ahead of him in trying to maintain power, keep Putin and Trump as allies, and juggle the entire oil market in the process.


    It Took 22 Years to Get to This Point

    Gold has been the right asset with which to save your funds in this millennium that began 23 years ago.

    Free Exclusive Report
    The inevitable Breakout – The two w’s

      Related Articles


      Join the conversation!

      It’s 100% free and your personal information will never be sold or shared online.


      1. Prince (the hitman) Bin Salman has got us by the testies and knows it.
        What are we going to do? kick all the Saudi based industry out of the U.S.? That aint gonna happen… they own us.
        I wouldnt work for those pricks if I had to. 7/12’s ?
        fk that theyd be lucky to get 3/8’s out of me.
        Theres some mind control shit going on working people 12 hour shifts… 7 days a week.
        Its like those cults that use sleep deprivation techniques.
        Plus i dont like that Arabic lettering all over everything.
        Go Libya…Keep That Crude a pumpin baby…

      2. Yet another puppet president allied with murderers in and out of country. A bloated degenerate armed to the teeth threat to humanity. Need a 25 million person mass march on D.C., yeah that’ll never happen.

      3. This whole thing is very manufactured.
        Who really gives a darn about a Saudi citizen who
        is also a WA Compost columnist, and a
        Moslem brotherhood member, getting sawed into
        little pieces? NOBODY! There is more to this
        story, than that.
        I’d like to saw 1.6 billion Moslems into little
        pieces and solve a large world problem for everyone,
        Russian, and Chinese alike.

      4. Salman apparently gives Kashoggi a shot (so he doesn’t feel the worst of it) and Salman is playing music (so isn’t fully present) and Trump wanted no part of it (tastefully).

        A mother has asked me to toughen-up her shut-in, but he already knows of the kinds of gore vids, which powerful people don’t want to know about.

        Are they moneywise. Are they given a short list of options, by their handlers, and do they improv, when asked their feelings. Nice, polite feelings, or it’s something non-binding.

      5. May the dung of 10,000 camels gently caress his head.

        • I wonder where it is.

      6. Not one thing will change in Saudi Arabia. The guy with the guns is the one who will be king. Saudis would be wise to remember the old saying ” if you strike the king you must kill him”.

      7. Who cares? Its high time to stop fucking around with countries who demand/beg for the American peoples money and energy. Its high past time we turn our backs to the corrupt lying, thieving pieces of shit who think they can use us and our lives as their playthings. Fuck some middle eastern goat fuckers and their oil and the rest of the world!! And a little side note people, there are not a billion chinese, asian indian, or animal molesting muslims. The numbers are skewed on purpose and then used in conjunction with other made up lies to control us and others across the world.

      8. The VERY Messed Up Origins of Little Red Riding Hood | Fables Explained (*after 2min of uselessness)

        Hundreds of year’s old children’s stories were much worse than sensationalist murder mysteries, for adults, in 2018.

      9. Personally I don’t care about the death of one muzlim terrorist turned journalist. More air for the good people to breath. Gee, I hope nothing like that happens to that little man baby Ocosta from the fake news network.

      Commenting Policy:

      Some comments on this web site are automatically moderated through our Spam protection systems. Please be patient if your comment isn’t immediately available. We’re not trying to censor you, the system just wants to make sure you’re not a robot posting random spam.

      This website thrives because of its community. While we support lively debates and understand that people get excited, frustrated or angry at times, we ask that the conversation remain civil. Racism, to include any religious affiliation, will not be tolerated on this site, including the disparagement of people in the comments section.