Is the shit about to hit the fan?
On top of the destruction to the Saudi Arabian East-West pipeline, the US Strategic Petroleum Reserve is at its lowest level in over 40 years.
Oil Prices Rise as Middle East Supply Concerns Persist
Brent crude futures rose 2.9% to $108.75 a barrel, while WTI gained 4.4% to $105.83 a barrel
From the article (bold emphasis mine):
Oil prices rose to four-month highs with the shutdown of Saudi Arabia’s East-West Pipeline and Houthi threats to shipping in the Red Sea keeping the market on edge about supply out of the Middle East.
…
Saudi Arabia is trying to resume partial operations on the East-West Pipeline within days, though damaged pumping stations could take six to eight weeks to fully repair, The Wall Street Journal reported. The 750-mile pipeline can carry as much as 7 million barrels a day from Saudi Arabia’s oil-producing region in the east to the Red Sea port of Yanbu, allowing crude exports to bypass the Strait of Hormuz.
The outage comes as the Houthis strengthen their position around another key oil-shipping chokepoint. The militants seized Perim Island in the Bab al-Mandeb Strait over the weekend after taking the nearby port of Mokha, further threatening oil flows through the Red Sea corridor.
“We’re compromised on three fronts,” said Tracy Shuchart, senior economist at NinjaTrader Group.
President Trump’s assertion Monday that Ukraine and Russia had agreed not to attack each other’s energy infrastructure didn’t work out with overnight strikes reported. U.S. retail diesel prices rose to a fresh record high around $6.27 a gallon Tuesday, according to the AAA. Diesel futures traded on the New York Mercantile Exchange rose 6.1% to a record high $5.262 a gallon.
“We’ve got a product market problem, we’ve got an oil market problem, and this doesn’t look to be rectified anytime soon,” Shuchart said.
Trump - in his usual and pathological fashion - lied about an agreement by Ukraine and Russia to not bomb each other’s oil infrastructure. In addition, he is trying to blame Ukraine for the spike in diesel prices.
Trump’s FollyTM - the Iran War - is proving to be the most disastrous foreign policy decision in recent U.S. history, with potentially catastrophic domestic economic impacts.
As usual, he is skating as fast as he can to 1) deflect blame onto others, and 2) stay one step ahead of the carnage he himself has created.
I’ll let foreign policy expert Phillips O’Brien explain better than I can what Trump has wrought:
The US is in retreat. It is watching bases of great strategic importance get destroyed and cannot protect them, it is abandoning allies that heretofore it considered of the highest priority, and it is making it clear that it cannot look after its own interests in some of the most important places of the world. This is clearly the end of the American Age.
The entire post is worth a read. It breaks down how the U.S. is failing from a Military, Diplomatic, and Market perspective. It’s damning.
Trump’s incompetence and ignorance, combined with the incompetence and ideological absolutism of his cronies in his Administration, and supported with the cowardly complicity of elected Republicans in the U.S. House and Senate, has led the U.S. into decline and economic/diplomatic crises that will take years to recover from, if that is even possible.
The messaging on this is clear. It’s the corruption, stupid, with a dose of incompetence. To repeat something, I posted the other day from Ben Collins, the one sentence opener for Dems should be:
“Every single Republican in our lifetime has sought to make our lives worse in every way possible. I’d like to change that.”
I’ll see you in the gas lines at the pump next week…
