News Saudi Arabia threatens to start selling oil in all currencies

[KMFJD]

https://www.reuters.com/article/us-...il-trades-to-stop-nopec-sources-idUSKCN1RH008

Saudi Arabia is threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to U.S. antitrust lawsuits, three sources familiar with Saudi energy policy said.


Good thing there's a master deal maker in charge

 

[1prophet]

It's too bad America didn't have an energy policy after the Arab oil embargo in the 1970s which includes energy independence, unfortunately alternative energy was presented as some green hippie tree hugging movement instead of an America first national security priority,

but we have options today,

and we should tell OPEC, especially the Saudi's, if they act stupid this time, we will push battery technology, electric cars, and alternative energy using government subsidies, tax credits and other promotions with the same determination as the race to the moon or the industrial mobilization that was necessary to win World War 2.

 

[Fanatical Meat]

With fracking doesn’t the US now produce more oil than we use?
Why we continually let oil nations drive policy is beyond my understanding.

 

[dank69]

It's too bad America didn't have an energy policy after the Arab oil embargo in the 1970s which includes energy independence, unfortunately alternative energy was presented as some green hippie tree hugging movement instead of an America first national security priority,

but we have options today,

and we should tell OPEC, especially the Saudi's, if they act stupid this time, we will push battery technology, electric cars, and alternative energy using government subsidies, tax credits and other promotions with the same determination as the race to the moon or the industrial mobilization that was necessary to win World War 2.

We should do that today, but Trump thinks all that hippy stuff causes cancer. Unlike healthy coal exhaust.

 

[jman19]

We should do that today, but Trump thinks all that hippy stuff causes cancer. Unlike healthy coal exhaust.

Beautiful clean coal.

 

[s0me0nesmind1]

With fracking doesn’t the US now produce more oil than we use?
Why we continually let oil nations drive policy is beyond my understanding.

We do. Were actually the #1 producer of oil right now if I recall correctly.

I'm not an economics person to know what this would effect. It's just trading oil in a different currency - I guess insinuating that our currency value would drop in some kind of significant amount?

EDIT: Yeap, #1 producer - at least in 2017 and I doubt it went down in 2018.

United States
The United States is the top oil-producing country in the world, with an average of 14.86 million b/d, which accounts for 15.3% of the world's production. This is down from 15.12 million b/d in 2015, but it was enough to land the United States in the No. 1 spot, which it has held for the past four years running

https://www.investopedia.com/investing/worlds-top-oil-producers/

 

[skull]

We do. Were actually the #1 producer of oil right now if I recall correctly.

I'm not an economics person to know what this would effect. It's just trading oil in a different currency - I guess insinuating that our currency value would drop in some kind of significant amount?

EDIT: Yeap, #1 producer - at least in 2017 and I doubt it went down in 2018.



https://www.investopedia.com/investing/worlds-top-oil-producers/

It ties all oil to the dollar making people use dollars to buy oil. Since the dollar isn't tied to gold anymore its known as the petro dollar because of it. I on the other hand have no idea what would happen either if that stops.

 

[HomerJS]

Instead of mocking the GND we should embrace its goals as we did the moon shot.

 

[kage69]

Wouldn't be good short term, but ultimately might help us focus on renewable energy and I'm all for giving OPEC and MBS the heave ho. We don't need cartels or "allies" like that.

I expect Trump to fold and retreat like he always does though.

 

[MomentsofSanity]

We do. Were actually the #1 producer of oil right now if I recall correctly.

I'm not an economics person to know what this would effect. It's just trading oil in a different currency - I guess insinuating that our currency value would drop in some kind of significant amount?

EDIT: Yeap, #1 producer - at least in 2017 and I doubt it went down in 2018.



https://www.investopedia.com/investing/worlds-top-oil-producers/

No, you don’t. You currently use over 5 million barrels a day more than is produced.

 

[s0me0nesmind1]

No, you don’t. You currently use over 5 million barrels a day more than is produced.

You're correct. My bad yo. We do consume more than we produce - However we are the #1 producer.

In 2018, U.S. total petroleum production averaged about 17.67 million barrels per day (mmb/d), which included

• crude oil—10.95 mmb/d
• natural gas liquids—4.35 mmb/d
• biofuels and oxygenates—1.23 mmb/d
• refinery processing gain—1.14 mmb/d

Total petroleum consumption averaged about 20.45 million b/d in 2018. The difference between petroleum consumption and production is mainly made up of net imports (imports minus exports) of petroleum and changes in petroleum inventories.

 

[Ajay]

It's too bad America didn't have an energy policy after the Arab oil embargo in the 1970s which includes energy independence, unfortunately alternative energy was presented as some green hippie tree hugging movement instead of an America first national security priority,
and we should tell OPEC, especially the Saudi's, if they act stupid this time, we will push battery technology, electric cars, and alternative energy using government subsidies, tax credits and other promotions with the same determination as the race to the moon or the industrial mobilization that was necessary to win World War 2.

With what money? This administration is too busy giving tax cuts to the wealthy to find the funds to support any useful energy policy.

 

[JEDI]

https://www.reuters.com/article/us-...il-trades-to-stop-nopec-sources-idUSKCN1RH008

Saudi Arabia is threatening to sell its oil in currencies other than the dollar if Washington passes a bill exposing OPEC members to U.S. antitrust lawsuits, three sources familiar with Saudi energy policy said.


Good thing there's a master deal maker in charge

ok.. dumb question.. why doesn't opec sell in currencies other than the dollar?

ands the consequences of them doing it now?

 

[KMFJD]

ok.. dumb question.. why doesn't opec sell in currencies other than the dollar?

ands the consequences of them doing it now?

i think it's the stability of the us dollar, some do buy oil in other dollars but the vast majority has been purchased with US currency since . The Chinese have setup futures trading based on the RMB but they want to keep it's value lower than the US dollar in order to make their exports cheaper to their #1 market (USA). It's been this way since the Bretton Woods meetings during WW2. The US dollar comprises something like 64% of world currency reserves (Euro at 20% and RMB is 1%) Since agreements in '71 and '73 with OPEC , oil has generally been quoted in US Dollars.


/that's the gist i got from a couple of articles on it.

 

[UNCjigga]

ok.. dumb question.. why doesn't opec sell in currencies other than the dollar?

ands the consequences of them doing it now?

My limited understanding is that having a petro dollar helps defray some of the effects of a bad recession, and makes spending our way out of one possible (like we did in '09.) Without it, we'd see a lot of inflation with the amount the government is spending.

 

[ElFenix]

With fracking doesn’t the US now produce more oil than we use?
Why we continually let oil nations drive policy is beyond my understanding.

globally traded commodity prices are set globally. being able to produce a shit ton of oil doesn't mean we're fully insulated from the market.

the main benefit to the US of saudis (and others) taking dollars is that there an inertia effect to them using dollars as reserves. that is, they sell a barrel, get dollars for it (which have to be purchased on the forex market if that barrel isn't sold to the US, and most aren't), and then, if they don't have anything immediate to spend the dollar on, they hold it. that dollar, if it never comes back, is basically a free loan to the US economy (at some point that dollar, which is a piece of paper with no inherent value, had been traded by a US person for goods/services, and if it never makes it back, we don't have to send back goods/services (which is why you want mexicans working in the US to remit back to mexico - that dollar might not come back).

 

[darkswordsman17]

This would be really interesting as it seems something Turmp supports but with him 69ing asskissing with the Saudis I can't imagine he'd actually support it these days. However, there are people that support him that would benefit. Short term, they'd push to subsidize oil production here (they'll try and fast-track offshore and won't be surprised if they declare national emergency to drill in areas like that land that Turmp tried to open up but the court recently ruled that Obama's ruling on it stands; so Turmp would love to do all that). Don't be surprised if he'd try to work a deal with Russia either (effectively bypassing sanctions, and don't be surprised if they try to become the biggest supplier just so they could then use it to try and get us to relinquish sanctions on top of it). And then it would give them reason to go hard for Venezuela.

And this is exactly why we need to get renewables and modernize our infrastructure to improve efficiency to help us being stuck with all these shitty situations (granted we will continue to be as we'll have to get stuff for the other from shitty situations as well, but there's potential to get beyond that if we can get some of the carbon based stuff like graphene living up to its potential). Stuff like this is also why it was stupid for us to let the big drive for drilling to happen in the past couple of decades, where a lot of ours got exported, just to sink prices and fuel consumers turning into dumbfucks again that buy trucks and SUVs because they don't have to care about gas prices as much (should've at least been taxing those vehicles to pay for infrastructure and helping us become less reliant on fossil fuels). We knew we'd almost certainly be facing down an energy situation, and so we should've been keeping it for standby for ourselves for when we might have to do something drastic.

As far as NOPEC, now's as good of time to do it as any. Congress should pass it while also making sure to handcuff Turmp so that he can't just make us Russia's bitch instead or start a war to get the oil (although they'll almost certainly let him declare emergency to open up and bypass stuff that's been holding up various drilling here), but let him take the fall for something that kinda needs to be done but will have some growing pains (plus it'd drive a wedge between him and the Saudis). Then the next President can use that as reason to push renewables and infrastructure since he won't. At that point though it becomes no brainer even for Republicans to get onboard renewables, and it'd give time for the major oil/fossil fuel companies to pivot to investing in green energy so they'll reap rewards and maybe stop fucking things up (who am I kidding, they'll just go hard in trying to exploit countries outside the US again while still trying to fuck things up here).

If they could find a non-shitty way to get a decent democratic government in Venezuela and work a deal for us to buy oil from them (enabling them to build up) that might also help with immigration from people in Central America, as there should be plenty of jobs and prosperity for them to seek there.

But this isn't gonna help with the radical Muslims that Saudi Arabia has fostered over the years (not that it matters even when we were helping them they were pissed off). Plus I wouldn't be surprised if Republicans try to force socialist stuff as things to use NOPEC against.

And with our current politics, this presents ample opportunity to just fuck things up and get us involved in more bullshit.

 

[alcoholbob]

Well, we can run deficits without the dollar losing value in the exchange market, which normally would cause quite a bit of inflation, but we can export our inflation.

We already saw some of the issues with what might happen with the dollar losing reserve currency status in the 1970s--price of commodities will spike in dollar denominated terms, and the government will have to run a balanced budget (or at least a much smaller deficit) or it might have problems selling the debt. We famously had Swiss franc-denominated "Carter bonds" in the 70s.

We definitely would be unable to run such a large trade deficit without reserve currency status either, the dollar would naturally lose value as we ran up trade deficits and we would have to either produce and export more to make up for it or consume less as we wouldn't be able to afford as many imports.

 

[tweaker2]

And then there's the Trump way of dealing with the toils of oil:

https://www.vanityfair.com/news/2018/11/trump-iraq-oi

I wonder what that'd do to the status of the petro dollar. Venezuela, you guys knew of this, right? If you guys get invaded by Trump kiss your oil g'bye.

 

[Skyclad1uhm1]

i think it's the stability of the us dollar, some do buy oil in other dollars but the vast majority has been purchased with US currency since . The Chinese have setup futures trading based on the RMB but they want to keep it's value lower than the US dollar in order to make their exports cheaper to their #1 market (USA). It's been this way since the Bretton Woods meetings during WW2. The US dollar comprises something like 64% of world currency reserves (Euro at 20% and RMB is 1%) Since agreements in '71 and '73 with OPEC , oil has generally been quoted in US Dollars.


/that's the gist i got from a couple of articles on it.

And because switching to another currency is a good way to get (even more) US sanctions. Just ask Iran.

 

[skull]

globally traded commodity prices are set globally. being able to produce a shit ton of oil doesn't mean we're fully insulated from the market.

the main benefit to the US of saudis (and others) taking dollars is that there an inertia effect to them using dollars as reserves. that is, they sell a barrel, get dollars for it (which have to be purchased on the forex market if that barrel isn't sold to the US, and most aren't), and then, if they don't have anything immediate to spend the dollar on, they hold it. that dollar, if it never comes back, is basically a free loan to the US economy (at some point that dollar, which is a piece of paper with no inherent value, had been traded by a US person for goods/services, and if it never makes it back, we don't have to send back goods/services (which is why you want mexicans working in the US to remit back to mexico - that dollar might not come back).

Besides keeping inflation down how does money not coming back help us? Lets take the illegal drug market, billions are sent over for a good that gets snorted up and its gone. No value was created but now billions are sitting in some room in a villa of a drug king pin that will never be traded around again. Instead if said money was spent on something legal the money would keep being spent it would give every one a chance to grab a chunk and the government makes more tax revenue as it changes hands.

 

[zinfamous]

With what money? This administration is too busy giving tax cuts to the wealthy to find the funds to support any useful energy policy.

It's not as if such gross negligence isn't part of the design.

 

[ElFenix]

Besides keeping inflation down how does money not coming back help us? Lets take the illegal drug market, billions are sent over for a good that gets snorted up and its gone. No value was created but now billions are sitting in some room in a villa of a drug king pin that will never be traded around again. Instead if said money was spent on something legal the money would keep being spent it would give every one a chance to grab a chunk and the government makes more tax revenue as it changes hands.

again, because little pieces of paper with no inherent value left the US in exchange for something with inherent value. you might not like cocaine but it is something with inherent value. if it were a barrel of oil coming into the US in exchange for little pieces of paper with no inherent value (or, more likely, just some 1s and 0s changed in a computer somewhere) which never come back, we paid nothing for that barrel of oil.

 

[hal2kilo]

It's too bad America didn't have an energy policy after the Arab oil embargo in the 1970s which includes energy independence, unfortunately alternative energy was presented as some green hippie tree hugging movement instead of an America first national security priority,

but we have options today,

and we should tell OPEC, especially the Saudi's, if they act stupid this time, we will push battery technology, electric cars, and alternative energy using government subsidies, tax credits and other promotions with the same determination as the race to the moon or the industrial mobilization that was necessary to win World War 2.

Who was it who ripped off the solar panels from the WH?

 

[KMFJD]

Who was it who ripped off the solar panels from the WH?

Ronnie Raygun