The New Tanker War – Trump Pampers the US Shale Oil Industry

The situation in the Gulf of Oman is getting worse. After the attacks on two tankers, Khamenei said that he would never sit at the negotiating table with the US again.¹⁾Radio Farda, Khamenei Says No Response To Trump’s Message, Questions ‘American’s Honesty’ 2019-06-13.So Iran will continue its nuclear program till the Israeli strategists interpret its advancement as unacceptable and will have Iranian targets attacked. Up to this time a new tanker war is more likely than 30 years ago, of which Gefira warned already in autumn 2018. ²⁾Sieh Gefira-Ausgabe Nr.26, Seite 21.Our forecasts proved correct.

The attacks could indeed have been carried out by Iranians, and it is quite possible that they were a provocation of the Americans. Such a hypothesis is justified by the analysis of the history of the conflict between the Great Satan and Iran. In August 1953, MI6 and CIA overthrew democratically elected Prime Minister Mohammed Mossadeq for wanting to nationalize the British Anglo-Iranian Oil Company (now BP). The company earned huge sums, of which Iran received hardly anything. The CIA’s Shah Reza Pahlavi, installed in place of Mossadeq, guaranteed the US that Iran would not cross over to the Soviet Union. With the help of the Americans³⁾Die CIA und der Mossadegh-Putsch im Iran, Deutsche Welle.he founded the secret service SAVAK, which suppressed the population, tortured and committed numerous murders.⁴⁾SAVAK-Irans Geheimdienst unter dem Shah, Parse&Parse 2016-10-29.The Americans were not bothered by this for decades, but today they are outraged by the violation of human rights in Iran: indeed by the violation of their interests in the region.

The nationalization of oil production did not take place under Pahlavi. Almost half of the proceeds continued to go to American and British companies. As in Afghanistan and other countries of the world, Americans have invented their future enemies themselves. The 1979 coup and the Islamic Revolution in response to Pahlavi’s governments were the result of the CIA’s actions, which in this way caused long-term damage to their own country by raising Islamists. Now we are witnessing manipulations similar to those before the First War in the Gulf. Americans are portrayed as those who must defend themselves and Iran as the real Satan. Is it not the case that Trump would like to turn off all the oil taps in the world so that the American shale oil industry can continue to flourish? In Venezuela, the American elites succeeded in installing the self-proclaimed president, the quasi self-made man Guido.⁵⁾The making of Juan Guaido, MPN News 2019-01-29.The Libyan General Khalifa Haftar, who is always responsible for the turmoil in this country and successfully marches towards Tripoli, was already trained by the CIA in the 90s.⁶⁾Who is Khalifa Haftar, Libya’s CIA-linked rogue general-turned-warlord? The New Arab 2019-04-10.By the way: Trump is also officially against the construction of the Nordstream 2 pipeline and wants to increase American oil exports to Europe. The escalation of the conflict with Iran and the closure of the Strait of Hormuz would be a blessing for American oil companies.

When on 18 May 1987 an Iraqi fighter jet fired at the American USS Stark, the Americans used the situation to accuse Iran (and not Iraq) for destabilizing the region. The tanker war war sparked, culminating in the Americans destroying two Iranian oil platforms and “accidentally” shooting down an Iranian civilian Airbus 300 (surely, out of concern for Iranian citizens suffering under the Islamic regime). Even now, some pretext must be found so that the US Sixth Fleet has something to do – collateral damage included.

But this time the Americans have to reckon with a much stronger opponent. Since the tanker war 30 years ago the Iranian Revolutionary Guard has intensively armed itself: small submarines, naval mines, naval missiles, patrol and speedboats: a hard nut to crack.⁷⁾Welche Waffen Israel und Iran im Arsenal haben, Focus 2012-09-24.

As long as the markets classify the conflict as a war of nerves and of words, the price of oil will remain stable. An escalation will drive the price up, even if history teaches the opposite: when the tanker war broke out in the 1980s, everyone believed that black gold would become more expensive. After the short “peak” (see chart), however, the price fell within the next few months, as production in other countries was running at full speed.

This story will not repeat itself, as demand will be dampened politically (Trump), and the American shale industry will not be able to react as quickly as OPEC to a crisis by increasing production. “In the US, there are a large number of shale oil wells that are idling as they wait to start production when oil prices finally rise. (…) Bloomberg reports that more than 3,000 wells have been drilled from North Dakota to Texas, but not tapped (…). This backlog of unregulated wells could allow the US to increase production in a higher oil price environment. The key question is how quickly (…) For example, Mihir Varia of Petroleum Services says it can take up to six months to get US shale production back online once it is closed.”⁸⁾Ein Blick auf die US-Industrie für Schieferölproduktion, Coin Group 2019-06.

So it is likely that we will soon experience one (perhaps) last peak in the price of oil. Trump’s trade wars and concerns about stagnation in the global economy, on the other hand, can have a negative impact on the price of black gold.