1/
A Q worth pondering is “why should #US #oil companies and #WallStreet not want the #war in the #MiddleEast to continue in a way that there are no #US boots-on-the-ground and the #MiddleEast #oil #gas #infrastructure continues to be steadily destroyed?”
With the rapid growth of #China #EV #batteries #solar #manufacturing capacity, the future of #global #oil #demand is not exactly that of rapid growth. More likely, decline is imminent.
2/
When aggregate demand starts shrinking, what could be the strategy of incumbents such as #US #oil companies?
Ensure that the biggest #oil #consumer doesn’t cut back - that would be the #US - and they have made sure of this buying off #politicians from both sides of the aisle while also boosting so-called #centrists who spout “all-of-the-above” strategy for #energy - Done!
3/
Increase market share. The #war in Ukraine is downsizing #Russia #oil #infrastructure and #Europe will keep supporting #Ukraine to hold that line even though the #US has cut back on aid to #Ukraine almost completely. Done!
For good measure slap #tariffs on countries buying #oil from #Russia (see India) and keep that in check - Done!
Capture a potential competitor in #Venezuela and bring a fast growing production field in #Guyana under your sway - Done!
4/
Bomb some other competitors such as #Nigeria - Done!
Kickstart a #war in the #MiddleEast with #Iran which extremely predictably leads to Hormuz getting blocked and more importantly retaliation from #Iran degrades the #oil #gas #infrastructure in the entire #MiddleEast - no need to win this #war - just keep it simmering for as long as you can.
With this the buyers of the world will start looking at the largest and safest producer in human history - #US - Done!
5/
Sure - #oil #price will spike and #poor #buyers will switch to #EV #batteries #solar and global demand will fall. But demand for #US #oil #gas goes up and equally importantly #market share goes up - i.e. more price control of the global market and more leverage - Done!
Why does #WallStreet stay happy? Because of growth in a well-established sectors such as #oil #gas #defence - which brings in $ and keeps it strong.
6/
Current Account Deficit falls and higher tax revenues start reducing fiscal deficit. Plus - #US continues to be a safe haven as most other economies are simply hammered by the impacts of higher #oil prices and #tariffs - so more #FDI for #US which further strengthens the #economy
Remember - this is #bipartisan or rather #centrist - so not much chance of it getting reversed any time soon irrespective of #US #election results.
/fin
@TinJar yeah, although how much is a monopoly on oil worth when oil reduces it's usefulness quickly?
It definitely is a short term boon for US oil. But medium term it might be very bad.
But stock price and bonuses care about short term.
Put yourself in their shoes - this is about prolonging the competitive position as long as possible. Definitely, worth the next couple of decades. Which is long enough a horizon for most of these folks, anyway.
TinJar
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