Forcing Oil Prices to Fall!
The current U.S. administration is attempting to push down oil prices as the midterm elections in the United States approach. It is also rushing to rebuild Venezuela’s oil industry, despite most U.S. companies’ reluctance to venture into the country to avoid future international legal disputes, in the absence of an independent government resulting from parliamentary elections in Venezuela.
The U.S. administration is eager to secure a major oil producer to ensure a steady supply, as its demand for crude oil and petroleum products from abroad is nearly increasing. The United States is one of the largest consumers, with demand around 21 million barrels, while producing approximately 14 million barrels, leaving a need to import 7 million barrels from abroad, particularly from Canada, as well as Mexico, Saudi Arabia, Brazil, and Iraq. The U.S. also exports some quantities to regions such as Europe due to the specific types of crude it receives and the inability of some of its refineries to process them, which leads to surpluses.
To date, only one U.S. company has agreed to enter Venezuela: Chevron, the world’s second-largest oil company, aiming to increase its oil reserves and thereby boost its stock value on global exchanges.
Oil prices have risen again amid reciprocal strikes between Iran and the United States in the Arabian Gulf region and various threats to close the Strait of Hormuz, pushing U.S. crude above $91 per barrel and Brent crude to $96.
With Arabian Gulf oil temporarily unavailable, Russian Urals crude is currently being sold in global markets at $112 per barrel. This crude is also increasingly flowing eastward to India and some Asian countries, making oil prices unfavorable for the U.S. administration ahead of the upcoming elections and as winter approaches, which will drive oil demand to its peak.
The U.S. administration will have to wait until after the winter season if it hopes to lower oil prices later. This timing will not benefit it, given that the elections are in November and coincide with peak global demand. All it can do is wait and hope for prices to fall below current levels, specifically below $90 per barrel for U.S. crude.
