Tuesday, June 12, 2012
Oil prices fell again yesterday (not today), settling on an 8-month low. The post hoc reason for yesterday's decline was at least a little curious:
June 12 (Bloomberg) -- Oil fell a fourth day after Saudi Arabian Oil Minister Ali al-Naimi said OPEC may need a higher output limit and the U.S. issued more exemptions from sanctions on buying Iran's crude, cutting the risk of supply disruption....Recognizing that there may well have been legitimate geopolitical reasons for the Obama Administration to grant waivers that allow various other countries, allies and otherwise, to purchase Iranian oil without suffering American reprisals, one of the consequences is that the price of crude -- no doubt relevant to Barack Obama's prospects for re-election -- has fallen to its lowest level since last fall. Mixed consequences do not always confirm mixed motives, but they often do. You decide.
The U.S. added India, Malaysia, South Korea, South Africa, Sri Lanka, Turkey and Taiwan to the list of exemptions from sanctions after they reduced crude purchases from Iran, Secretary of State Hillary Clinton said yesterday in an e-mailed statement. Clinton announced in March that Japan and 10 European Union nations had qualified for an exemption for a renewable period of 180 days.
India and South Korea were the third- and fourth-largest buyers of Iran's crude in the first half of last year, according to the U.S. Department of Energy. China, the Persian Gulf nation's biggest customer, and Singapore, Asia's oil-trading hub, weren't exempted from the sanctions, which are targeted at curbing Iran's nuclear program.
You know, I could *swear* NPR did a story this morning about how Obama was cranking up the sanctions on Iran, because he had determined the global oil supply was large enough to allow for new restrictions in their shipping. Now that I see these "restrictions" are nonexistant, it makes much more sense.
If we were to "drill, baby drill" and bring the tremendous domestic resources on the market, wouldn't that add a huge level of security and stability to the supply chain and relax oil prices even farther?
I'd like to point out that a collapse in prices means a collapse in income for countries that rely on exports. If the market outpaces Iranian output, the result may be more barrels sold/less money coming in. Almost nothing would fuck the Iranians worse than $45/barrel oil prices.
Not to imply that that's a goal here, however; the Obama foreign policy team (whoever they are, now; I get the impression Clinton has been frozen out) appear to be terminally incompetent morons who see the world not as it is, was, or will be, but how their professors in the 60s and 70s told them it was; "tell us more about how Hezb Allah wants to be our friends!" Idiots.