Trump folded like a cheap suit.
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A confrontation is brewing between Trump and Saudi Arabia over oil prices, The Wall Street Journal reports, citing sources.
Trump’s team has already realized that significantly increasing U.S. oil production to lower global prices is not feasible.
"According to oil company executives, another American oil boom is not expected anytime soon, regardless of how many regulations are lifted. After many producers drilled themselves into bankruptcy during the peak of the shale boom, the industry is now focused on cutting costs and returning money to investors," WSJ writes.
As a result, Trump has decided to persuade Saudi Arabia and other OPEC countries to flood the market with more oil. However, Saudi Arabia has already stated that it has no intention of doing so.
Trump's team aims to lower oil prices to $45 per barrel (currently at $73, compared to over $94 in 2022). But such a drop could be "catastrophic" for American shale producers and Saudi Arabia—"Trump’s two most influential allies in the global oil market."
Dozens of shale drillers went bankrupt in 2020 when prices collapsed due to COVID. Meanwhile, Saudi Arabia would struggle to balance its budget at such price levels.
Notably, so far, Trump has only managed to raise oil prices by introducing tariffs.
@DDGeopolitics