Trump would consider halting U.S. oil purchases from Saudis: NYT

Discussion in 'Politics Discussion' started by baudwalk, Mar 27, 2016.

  1. baudwalk

    baudwalk Senior Investor

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    http://www.reuters.com/article/us-usa-election-trump-idUSKCN0WS0NG
    Boy, wouldn't that action roil the oily waters. Obviously there are many moving parts to implementing such a step, but it surely would attract the Saudis' attention. Military arms sales from USA firms to SA undoubtedly would be affected -- would Russia and/or China step in? -- what would happen to our bases on SA soil? The status quo would be shaken up, to be sure. It would be interesting.
     
    Last edited by a moderator: Jul 8, 2016
  2. ScooterBrandon

    ScooterBrandon Senior Investor

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    That's very interesting. There is certainly enough oil available in North America to satisfy demand. Which is why I get a little irked when people call Canadian oil "dirty" and also try to block pipelines being developed in North America.
    See the thing about Canadian oil is that we have spent BILLIONS developing technology to take it out of the ground in the cleanest way possible, and a large number of good hard working people make a decent living from it. It's the same with a lot of the oil coming out of the USA.
    Do you think Saudi Arabia gives a hoot about how their oil production methods impact the environment? Of course not! They got stinking rich by pulling it out of the ground the cheapest way possible, which of course includes a billion barrels worth of human rights abuses.

    I don't know about the other geopolitical repercussions of doing this, but I have to hand it to Trump he does seem to have a really great idea here.
     
  3. Rainman

    Rainman Senior Investor

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    Saudi Arabia could respond by pumping more oil. Oil prices would drop. North American oil producers would also have to lower their prices. What impact would that have on the economy, the stock markets? But since Saudi Arabia isn't a reliable ally any more maybe the U.S could get herself some new allies in the Middle East?
     
  4. erook7878

    erook7878 Well-Known Member

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    We are headed that way anyway with solar and other renewable energy. The faster it happens, the better. I'm not sure what the short term effects will be though.
     
  5. petesede

    petesede Guest

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    ah.. Trump Trump.. the man who thinks for 3 seconds than spouts out anything that comes to his brain. Not buying oil from SA would do nothing except hurt the USA. Oil is a huge global market. If we buy from someone else, it would just mean we are paying more.... and at the same time, China will gladly jump in and buy the SA oil. SA would not even notice.
     
  6. crimsonghost747

    crimsonghost747 Senior Investor

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    Well lets see, the USA is already capable of producing all the oil it needs. So why do they buy it from the Saudi's... because it's a nice little "I give you this, you give me that" business. So yeah, this would probably hurt the USA more than it would hurt anyone else.
     
  7. eddiemoneys

    eddiemoneys Well-Known Member

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    It's not a terrible idea as long as other methods are able to replace it. We have entire industries that are still entirely reliant upon crude oil and there is a petrol market that won't ever go away as long as the resources remain to provide for it. Is it a good idea to buck the providers of it right now? Probably not. It would be great to see more solar powered alternatives and other energy products, but America cannot afford to cut off its nose to spite its face this time. Not with oil. I'm sure Trump means well and has a way he may want to go about all of it, but there are other areas he can change first before going after this. Out of the blue decisions not to do business with people who are established partners to see who else steps up and what their terms are is not safe. You can take those risks with some types of businesses, but these are people's lives and all their businesses that are reliant upon this. Trump needs to reconsider.
     
  8. baudwalk

    baudwalk Senior Investor

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    Who would the Saudis sell enough oil to make up the loss of the USA market?
    Despite government grants during the Obama administration, more than a few companies have cratered. Taxpayers are on the hook for $2.2 billion in costs, and $1 billion in defaulted loans. Remember the infamous Solyndra stimulus? The USA renewable electricity production, per the IEA appears to be flat at best. As a conservative investor seeking income, I don't see any decent investment opportunities in the sector.
    Sitting there with a stopwatch?
    Your source, please?
    The current IEA Oil Market Report figures shows China's Demand by Oil Product is projected to fall by ~3% y-o-y, fuel oil by ~30%, in 2016. What is your source to suggest China would purchase the USA's allotment of SA oil? The OMR further comments
    In my opinion, your assertive comments without sources on such matters suggests a lack of credulity.
    We don't need Canadian oil sands? And do you define "business" as the sale of military hardware against paying for strategic military bases and oil purchases? The "deal" seems lopsided to me, in favor of the Saudis.
     
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  9. ScooterBrandon

    ScooterBrandon Senior Investor

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    To add to your impressive list of replies Mr. Baud I think if SA tried to up supply to drop prices that would really only hurt them the most.
    They also get hurt when prices drop, I say even more-so. Despite the fact that it's really cheap for them to produce, it's also one of the only things their economy is good for, unless you count that one tourism season they have. With the new guy in power, it's going to take BILLIONS of dollars for him to keep buying the loyalty of the ever growing numbers of ruling elite.
    The US economy is modern and diversified, yes low oil prices hurt it's producers (and ours here in the Great White North) but low oil prices also help consumers and other industries.

    I think If Trump demanded Saudi's help fight the war (a war they helped inspire some few decades ago might I add) or he will stop buying their #1 export, I think the Saudi's would buckle and send some troops.
    Would be an interesting geopolitical event to say the least.
     
  10. Corzhens

    Corzhens Senior Investor

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    For an oil consumer country, we would be happy to see that development - pumping more oil to drop the prices. That is actually what is happening now. Saudi Arabia didn't agree with the OPEC motion to lessen the production of oil simply because Saudi Arabia needs the money to finance their military contingent in Syria. So if the US would halt purchasing Saudi Arabia oil then some other countries would buy from Saudi Arabia at a lower price. And where would the US get their oil requirements?
     

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