Commodity Trade Mantra

Posts Tagged ‘Oil Importer’

OIL - The Untold History of Black Gold & How it began the Political Strategies of the West

The political strategy of the U.S. had to adapt to provide for the needs & wants of the American population. The ‘70s marked the turning point when the U.S. shifted from being an oil exporter to the world’s largest oil importer. The oil crisis of 1973 was the game changer that transformed the international political & financial system into the current system of petrodollars & oil wars.

Low Oil Prices Didn’t Boost Consumer Spending, Nor The Economy - Here's Why

There is no question that lower oil prices have been a big windfall for consumers. But we’re not seeing much evidence that consumers are spending those gains on other goods or services. While a sharp increase in oil prices can reduce U.S. GDP growth, it’s harder to see evidence of significant net gains for U.S. GDP from a sharp decline in oil prices. Here is why.

Make No Mistake, the Oil Slump Is Going to Hurt the US Too

Oil would have to fall even further if it’s going to rebalance the oil market by bankrupting the world’s most marginal producers. As North American shale producers have relatively high cash costs, the Saudis could very well succeed in making a big portion of US and Canadian oil production disappear, if they are determined to.

Why OPEC Will Tolerate Cheap Oil

While the current dip in energy prices clearly does hurt Saudi Arabia, it hurts her enemies far more, particularly Iran & Russia, which has been a key enabler of Iranian power. Putting pressure on Russia has also become a key strategic interest of Washington. Cheap oil likely will protect & increase Saudi Arabia’s oil market share.

The Rise of the Petroyuan and the Slow Erosion of Dollar Hegemony

For the last 40 years, a pillar of dollar primacy has been the greenback’s dominant role in international energy markets. Today, China is leveraging its rise as an economic power & as the most important incremental market for hydrocarbon exporters in the Persian Gulf & the former Soviet Union to circumscribe dollar dominance in global energy.

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