Saudi, OPEC and Russia leaders have to be celebrating the recent jump in the price of crude oil to nearly $80 a barrel.
Russia, for example, needs $90 oil to begin generating enough revenue to dig itself out of the financial hole it’s been in since the price of oil crashed in 2014/2015.
So with the price of oil more than $10 from that Russian target, it was a bit shocking to hear from President Trump last week that he had called Saudi King Salman and had convinced him to commit to pumping an additional 2 million barrels of oil a day to keep the price of oil down.
What Saudi King Salman agreed to was to take steps to meet global demand now that resurrected Iranian sanctions would reduce the supply of the market at a time when Venezuelan oil production is collapsing.
The decision to abandon the Iranian nuclear treaty, even at a time that U.S. Oil production will exceed its domestic consumption has put President Trump in the position of pre-shale oil age Presidents who routinely went to the Saudis asking and sometimes pleading for boosts or cuts in production for U.S. economic purposes. The problem, of course, is Russia is now a huge player in the world oil market.
By scrapping the Iranian Nuclear Treaty Trump's has put Saudi Arabia, OPEC members, as well as Russia, an even stronger leverage in the global oil market.
President Trump’s embarrassing lie, about convincing the Saudi King agreeing to increase oil production was walked balked White House Press Secretary Sarah Sanders who released a readout of Trump's conversation with King Salman that clearly showed the President's original tweet was lie …
"In response to the President’s assessment of a deficit in the oil market, King Salman affirmed that the Kingdom maintains a two million barrel per day spare capacity, which it will prudently use if and when necessary to ensure market balance and stability, and in coordination with its producer partners, to respond to any eventuality."
President Trump has made it much harder for the price of oil down before the upcoming U.S. midterm elections. Punishing Iran with sanctions that will result in steep cuts in Iranian barrels of oil reaching global markets, could drive the price of gas to as high as $4.00 a gallon by election day creating still another election-year nightmare for Republicans already facing a huge backlash from other very unpopular Trump Administration policies.