Trump made the news... again. (He does so every day.)
This time he decided to spend billions of dollars to lower the oil prices. Maga rejoice!
But... who is going to pay the bill? Not him, that's for sure!
Pro and con - please read
Regardless if you're a red or blue voter, regardless if you're a Trump supporter or not, we all should use our brains.
Now, I'm a European, so looking at the US - from a convenient distance - put things in another perspective. And frankly, I'm still baffled by the things going on. It almost seems like nobody questions the motivations behind certain actions.
It's clear to most (apparently not to all) that 'subsidizing' oil pricing is a politically driven move to bring more voters to the Republican camp. Basically, the current US government is buying votes. I thought that was illegal?
On top of that, you need money to buy those votes, so who is going to fund the bill?
Trump... not
Well, if there is one thing for sure, then that it isn't going to be Trump - nor his family - to pay it from his own pockets. Nope. No, ain't going to happen.
So, the only way he's going to 'subsidize' oil prices is by increasing the US debt pile, which in turn - some day - needs to be paid for... by the citizens of the US. (That is assuming that we won't see a World War 3, or some other perhaps even deliberate event to lower the value of the US dollar, but that's a whole different story.)
So, rejoice, fellow Murricans! We get cheaper oil and pay for it ourselves!
But... why is oil that expensive?
Here's a little sequence of events...
- Invasion of Ukraine
- Trump's support of Putin
- Kidnapping of the Venezuelan president Maduro
- Ukraine attacks on Russian oil refineries
- Attack on Iran
- More support of Putin
- Subsidizing oil
Oil (still) is the 'blood of the world'. We all need it. Who controls the oil controls the world.
A more cynical person than me might suggest all of Trump's oil price manipulation (attempts) are only benefitting one party: Russia. Might that be true?
1. Russia - with the invasion of Ukraine - was basically opening itself to attacks on its refineries.
Let's be clear: Russian invaded Ukraine to continue a bit of land-grabbing that started with the occupation of Crimea. Basically, it's one country attacking a completely different country, without any legit reasons. (It's a theme we will return to.) The reasons given are basically excuses.
Putin, unfortunately, now has no way to back out of his dilemma.
Trump has more than once shown that he admires 'strongman' Putin, and his imperialistic style of Russian capitalism. Some suggest that Russia has some hold over the US president that goes beyond simply sympathy.
The world oil prices rose immediately after the invasion, but then slowly settled down over time. The invasion of Ukraine did affect pricing before Ukraine attacked the oil refineries, mostly driven by fear of losing Russion oil export. Russia found Asian buyers, whilst the rest of the world looked for other sources.
The US increased its production during this time.
2. Trump supporting Putin
During his first presidential sting there were some indications of a 'tendency' to support Russia and Putin. Proclaiming to defend the free west, but not doing much except selling weapons and threatening to leave the NATO is pretty much all the US did at the time.
And yes, the EU didn't excel with a pro-active stance either... they did pretty much nothing.
In spite of public statements of support, the US has been withholding information and blocking the sale of weapon systems to the Ukraine. It also limited the delivery and forbid the use of any long range weapon systems that would allow attacks on Russian home soil.
3. How to kidnap a president and take a country's oil
Regardless if you like Maduro or not, he was the head of state of another, independent country. So, basically, the US troops went in and grabbed a president. Next thing you know is the US more or less taking over the oil business. (It's a little more complicated than that, but it is what it boils down to.)
Can you do that? Invade another country? Grab a president? Ignore any international laws?
Apparently, yes. And grabbing a few million barrels on your way home is just a positive side effect.
(And let's ignore the precedent... will this allow the US to grab Greenland next? By force? Will it legitimize China grabbing Taiwan? And Russia taking Ukraine?)
Look at the signal this gives: if you don't cooperate, we'll invade you and kidnap your president.
If the US can attack any other nation at will, then obviously Russia has the right to do the same thing. Right?
Now, with their hands firmly on the Venezuelan oil fields and companies, the US has given themselves a bit more 'oil backup'. It might require some different kind of refineries, but coincidentally, the US has those refineries on the south coast.
4. Starlink versus Oil
Elon Musk build Starlink, and once the Ukrainians got their hands on it they used it to attack remote locations which would otherwise not be in reach... such as military bases and oil refineries.
Ukraine - unable to stop the incoming bombardments - basically has decided to cut Russia's income by bombing their refineries and oil transport capability. This increases oil pricing world wide (though not as much as the attack on Iran).
Starlink allows Ukraine to attack remote targets deep in Russia without GPS / Glonass dependencies, real time remote control, instant / rapid communications.
At first that wasn't a problem, but now the Ukraine is building more and more long range missiles and drones, the Starlink system now comes into full use, allowing the destruction of military bases and oil refineries far deeper into Russia.
By destroying the oil production and transport facilites Ukraine is doing what all the sanctions did not: killing the money stream flowing into Russia.
Interestingly, the oil prices did not immediately jump sky high after Ukraine attacked those refineries. In other words, the reduction of Russian oil production mostly hit Russia by lowering their income.
5. Iran is the easy prey... not
Well, that was a mistake... or a calculated mistake?
Attacking Iran wasn't a 'five minute strike and go home' event. Nothing has been resolved, lots of weapons were used, relations with former allies became strained, and the shipping of oil got seriously hampered and thus prices went up. And up. And up.
(Should I also bring up that Trump & Co have heavily invested in oil companies, thus high oil prices is actually making him money? It's not in his personal interest to lower prices...)
One of the side effects of the attack on Iran was the jump in oil prices world wide. Russia now gets paid more for each barrel exported than before, which is important as their export is hampered by the Ukrainian attacks.
A quick Iran-US solution doesn't help Russia. That would lower the pricing of oil, and wouldn't increase Russian production. Interestingly, every attempt to finding a solution falters, and the conflict keeps on going. Who wins the most? Russia.
5b. Datacenters
Ukraine recently added Russian datacenters to the target list, and this suddenly increased the verbal levels and nearly open support for Russia by the US administration. Some claim these attacks are affecting the bot armies that Russia might be trying to influence the US midterm elections.
That is a possibility - I personally saw a lot less pro-Russia trolls and bots lately - but what's probably more important is that these attacks directly influence daily life in Russia, by taking down internet services, movie streaming, and other modern day conveniences. The average Russian citizen can't help but notice.
Also, destroying internet and communication structures will further reduce the effectiveness of Russian businesses and reduce productivity, thus again reducing the influx of money.
Stop those attacks on those datacenters, and yes, you're helping Russia.
6. Blame Zelensky!
Trump telling the legitimate president of another country to leave office is... interesting. Trump withdrawing tariffs and penalties on Russian shipping and (there it is again) oil isn't surprising. Announcing a deal to buy diesel from Russia is. (Although it's questionable if Russia can produce and export that amount of diesel right now, and the amount wouldn't be enough to substantially affect the world oil pricing anyway.)
So, basically, Trump is telling Zelensky to surrender Ukraine to Russia, because Zelensky's attacks on Russia would be the cause of the increase of fuel prices in the US...
Seriously?
Do the current US government ignore the fact that most of the rising oil prices were caused by the attack on Iran, and not those on Russia? Guess who attacked Iran?
(And again, the same precedent. If Russia is allowed to grab Ukraine, then what's going to stop China grabbing Taiwan? Or the US taking Greenland?)
Ukraine, obviously, ignored the wise (?) words of Potus, and simply attacked more refineries near St. Petersburg, further reducing Russia's income. This new wave of attackes had (again) way less impact on world oil prices than the US-Iran conclict.
Trump's response? Call for and end of the war, removal of Zelensky, and actually (where does he find the guts) Trump calls for a three-nation meeting between Russia (Ukraine landgrab), China (Taiwan landgrab) and the US (Greenland landgrab) to discuss the future of the Ukraine - without Ukraine attending, or having a say.
Here you have three wolves that all three win if Ukraine loses. What do you think is going to happen if the wolves put it to the vote?
7. Subsidize oil - the capitalistic way
Ask yourself the question: who is going to pay for subsidizing oil? Yes. You.
Putin just laughs. Trump is making all the right moves... when it comes to Russian interests.
7b. The tarif scheme
Come to think of it, even the tarif scheme is helping Russia. You see, it reduces other world wide trade, hampering the other world powers when trying to do business with the US. Some of those trades now go directly to Russia - trades they wouldn't have had without the tarifs. And in the end, the winner is... Russia. Again.
How to lower oil prices
1. Stop Ukrainian attacks on Russian refineries.
As Ukraine is merely defending itself, you'd have to stop the reason why they are bombing those refineries, and that would be the Russian invasion.
So... help the Ukrainians to boot out the invaders, and make sure Russia stops invading other countries.
Problem solved. At least for the Russian production.
Note that Trump - having heavily invested in oil related stocks - actually makes more money if the war drags on for year after year. But he'd like his Republican party to stay in control, so he's going to support stopping the war. Leaving Ukraine as an independent country could theoretically lead to a future conflict - not in Putin's interst - so Trump will vote for giving Ukraine to the Russians. He doesn't care...
2. Stop attacking Iran
... and find a solution, if you can. Don't blame other countries for the mess you left behind.
I have no easy solution for this one. I hold no love for totalitarian governments in any form, and what's happening out there is wrong, but a couple of bomber strikes isn't going to change much.
Finding a solution would lower oil prices, and Russia first need to rebuild everything Ukraine has destroyed. It isn't in Russia's interest to stop the US-Iran conflict. Russia likes the higher oil prices.
3. Stability
Don't navigate the world's political theater like a drunk baboon. Stick to your promises and agreements.
In a stable world it's easier to come to arrangements and agreements. We all need people who can trust.
Sorry, uncle Don. Nobody trusts you anymore...
A clueless, toothless EU that falls to pieces whilst Russia continues its landgrabbing. Ukraine today... who's going to be the next one tomorrow? The conflicting signals from the US about (not) supporting their European allies helps weakening any strong response from the EU block. Russia loves that.
4. Make oil less important
Generate energy in any way you can. Yes, that's solar. Wind. Hydroplants. If you have to, even nuclear fission or (a much better option) fusion.
Is it me, or is the (current) US government doing exactly the opposite?
If the world depends on oil, then you control the world by controlling oil. Losing that control is scary, so you don't want that. Trump isn't making money on alternate fuels or energy sources, and any alternative low cost energy source would rob Russia of their only remaining income.
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