FAST FIVE: Oil Prices Set To Spike Again Due To Struggling Global Supply Chain
It is essentially market manipulation at the expense of US strategic readiness and for the express purpose of political gain.
Another factor is the failing attempts at a nuclear deal with Iran and the lifting of sanctions by the west. The free flow of Iranian oil will not be happening anytime soon, leaving western access to a major oil pool off the table.
The accusation may become true in certain respects, though, as Russia cuts natural gas supplies to Europe and the EU flails around this winter looking for replacement energy sources. Europe's desperate search for oil, coal and gas will siphon supplies away from the global markets leaving all other countries with less. The obvious result will be much higher prices for everyone.
There is also the issue of the stronger US dollar. As the petro-currency, most oil around the world has been purchased in dollars which allows Americans to enjoy lower prices. However, sanctions and economic tensions between east and west have led to a rising trend of bilateral trade agreements cutting out the dollar as the reserve currency. Furthermore, the strong dollar has also led to turmoil in FX markets and in foreign currencies like the Japanese Yen, which may lead to increased dumping of US Treasury holdings by international creditors. We could soon be facing a coordinated effort by central banks to crush the dollar even as the Federal Reserve seeks to strengthen the Greenback through interest rate hikes.
If the government gets a first purchase arrangement, then drillers will not be able to supply as much oil to regular consumers and prices will continue to spike. If the government does not get a first purchase contract, then any excess will probably be snapped up by European buyers. Either way, general consumers will not enjoy any benefits of increased drilling if it occurs, and Biden's fraudulent green energy agenda will only restrict oil producers even more. All in all, every observable factor suggests high oil and gas prices in the near term. Tyler Durden Mon, 09/26/2022 – 21:20.