One of the moves the Trump administration has made is to desanction Russian and Iranian oil and gas. Now, to the extent I know anything about our current foreign policy, it’s that we have been trying very hard to sanction Russian and Iranian energy exports. So what is going on there? I think we are showing in this conflict the limits of the willingness of the American people, the American government, to bear pain in energy markets, pain at the pump to pursue foreign policy objectives. That has always been the case. I worked in the Obama White House when the original sanctions were put on Iran. And the big question was: How do you take Iran’s oil off the market? That was around one and a half, two million barrels a day. And not send oil prices skyrocketing in the process. How do you impose the pain on them but not impose it on us? And so we’ve always been reluctant. And Iran is realizing that now, they know that, that’s why they’re doing what they’re doing in the Strait of Hormuz. So because oil prices are going up so much, the administration is looking to pull every lever it can to find some relief. And one of those sources of relief is Russia has produced a lot of oil that is sitting, floating on the water, so to speak. It’s in tankers looking for a buyer. It was having to discount that oil a lot to find a buyer, because people don’t necessarily want to touch sanctioned oil. You have to use a shadow economy to do it. And they’re saying now, please take those barrels as fast as you can, get them into the market to bring prices down. And now they’ve done the same thing for at least the next 30 days for Iran. OK, I’m sorry, but that’s insane. Just as a 30,000 foot — that we are bombing the country into rubble, that, as we speak right now, threatening to destroy their power plants, and desanctioning their oil, like, it really shows something here was unplanned for or is off. And also that if we’re at a place now where we are waiving sanctions on Iranian oil for 30 days so that they can put that oil in the market as fast as possible, it probably would have been sold eventually anyway, but let’s do it faster. And, again, they’re going to get a better price for it. We may be running out of good options to bring oil prices down. And I just think, again, this is why oil has always been such a key geopolitical weapon and such a key geopolitical vulnerability.
Source:
www.nytimes.com
