Saudi Arabia and Russia claimed to have sparred each other in a massive oil war that was supposed to flood the market with oil. Each one claimed that they were wanting to get a larger piece of the market from the other nations. But what is proving to be the truth is that they wanted to push the United States out of the oil market. They wanted to push the American driller to the point of bankruptcy so they would have to shut down. But that has only backfired in their faces.
Oil trackers show that at least 30 ships are making their way to the United States. All of them are full of oil from the Arab region. The coronavirus caused a major surplus to develop which has only begun to decline as more people are taking to the streets again. It is estimated that 50 million barrels of crude oil will hit the coast in a few months. Russia and the OPEC nations are hoping this will cause America to shut down its oil rigs.
The price war between Russia and Saudi Arabia was just a cover for their real purpose of attacking the American oil industry. Sandy Fielden is the director of oil and product research at Morningstar Inc. She has stated that “The expected Saudi deliveries could push U.S. inventories back to builds depending on their timing. If the shipments land at a rate that isn’t balanced by falling production or an uptick in exports, then we’ll see a domestic build.” What the Arabs are going to face are all of their ships are going to be stuck at sea because President Trump puts America first. American drillers will have priority first when it comes to sales and storage.
One report shows that storage is 5 million barrels shy of reaching capacity. But they will not receive priority over U.S. companies. The Arabs actions are nothing short of a bully tactic to try and make the United States dependent on their oil Paola Rodriguez-Masiu is an oil analyst and he stated: “If all the Saudi tankers unload, the crude they carry will offset during May almost all of the production reductions from March levels, effectively maintaining the current high storage filling rates.”
While all of this may be bad for oil producers it certainly is a positive thing for consumers. Prices are so low at the pump right now that people are saving hundreds of dollars per month. The low prices for gas and diesel certainly have helped people that are struggling because they are out of work due to the coronavirus. What is bad for some is extremely good for many others.
President Trump has already work ahead to get the nations of OPEC and Russia to slash their drilling endeavors. These tankers are just the ones that set sail when the so-called price war started. The Democrats would look at this problem and hide, but President Trump proactively stopped the two nations from destroying the world’s oil market.
To put into perspective how much oil is sitting off the coast it is estimated that what is there now is equal to a third of what was produced for America last year. There is a devious purpose to what the eastern nations have done. But every action has a consequence. The Arabs have had to wait for their ships to be unloaded. Those ships have to sit in the ocean for weeks before they can be serviced. In one way or another, their production will slow down to meet up with consumption. The Democrats are crying that storage is going to run out soon, but they fail to see the ships as storage devices themselves. In the end, they pay more for sitting in line.
The American consumer has nothing to worry about. President Trump will make them sit as storage units for the oil until they are needed. He has forced the Russians and Arabs to cut back their production. All for the sole purpose of keeping America great.