U.S. President Donald Trump took to Twitter again on Wednesday to complain about high oil prices and criticize OPEC, demanding that prices be reduced—and this time it was Iran that reacted to his latest tweet, saying that the President’s tweets about oil have already pushed up prices by at least $10 a barrel in recent weeks.
On Wednesday, President Trump tweeted:
“The OPEC Monopoly must remember that gas prices are up & they are doing little to help. If anything, they are driving prices higher as the United States defends many of their members for very little $’s. This must be a two way street. REDUCE PRICING NOW!”
This was President Trump’s fourth tweet about high oil prices and OPEC in as many months.
Since April, President Trump had criticized OPEC twice for manipulating oil prices, calling the cartel out for oil prices that are ‘too high’.
On the day of the OPEC meeting on June 22, President Trump tweeted again: “Hope OPEC will increase output substantially. Need to keep prices down!”
Now Iran is responding to the latest tweet, with its OPEC Governor Hossein Kazempour Ardebili addressing President Trump via the Iranian oil ministry’s news service Shana:
“Mr. President, may I ask you, what are you talking about? OPEC has not defined oil prices for the past 30 years … You impose sanctions on major producers, founders of OPEC, and yet you are asking them to reduce the prices?! Since when did you start ordering OPEC! Your tweets have driven the prices up by at least $10/b.” Related: Oil Prices Slide On Small Crude Build
“Pls stop it, otherwise it will go even higher! Your Excellency? there are not that much oil available to respond to your orders; you are hammering on good guys in OPEC, which you are claiming, you are defending them. You are actually discrediting them and undermining their sovereignty, we expect you to be more polite,” Kazempour said.
Earlier this week, Kazempour was quoted by the same outlet commenting on the U.S. push to remove Iranian oil from the market.
“Donald Trump’s call on other countries to stop buying crude oil from Iran and putting European companies under pressure with Nigeria and Libya being crisis-stricken, Venezuela’s crude oil output having plunged and Saudi Arabia’s consumption increasing due to summer, would be a kind of self-harm for the US as it would lead to dramatic price hikes in the oil market. As a result, American consumers would have to pay the price of Trump’s unilateralism at gas stations,” he said.
By Tsvetana Paraskova for Oilprice.com
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Moreover, his accusations to OPEC of manipulating oil prices is incorrect and unfair. While OPEC has to defend its members’ interests, its ultimate objective has always been the stability of oil prices and the securing of a fair price for its members.
It is the United States which has been manipulating oil prices for years to achieve economic and geopolitical aims through exaggerating US shale oil production figures and rises in US crude and product inventories and also through the petrodollar. People in glass houses shouldn’t throw stones.
President Trump is well advised to take a crash course in the economics of oil to learn about the machinations of the global oil market and also read history books. If he does that he will learn that America’s collusion with Saudi Arabia on oil prices in the 1980s was a major reason behind the collapse of the Soviet Union. He will also learn that America’s prompting of Kuwait and Saudi Arabia to flood the oil market with oil in the aftermath of the Iraq-Iran war was the reason behind Saddam Hussein’s invasion of Kuwait and the ensuing first Gulf War.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London