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Trump, the worst American president of the Gulf states, oil

OPEC repeatedly attacked and threatened to ban its imports and the United States incurred billions of losses because of its “rocky” policies

Anas bin Faisal Al-Hajji is an economist specializing in the energy field

In terms of oil, US President Donald Trump was one of the worst American presidents for the domestic and international oil industry, and thus for the oil industry in the Gulf; He fought any rise in oil prices, and used various political pressure to keep it low.

During his reign, the shale oil industry suffered its worst days financially, even before the appearance of the Corona virus, and its industry friends incurred billions of losses, including his energy advisor Harold Ham, president of Continental Resources, who lost a few billion due to Trump’s policies. The reason for the latter’s disregard of the leaders of the shale oil industry; He knows perfectly well that they will elect him anyway because the alternative, in their view, is much worse so he squeezed them.

During his reign, electric cars spread widely, although he did not intend this, but he threatened to impose a ban on Saudi and Russian oil, as he threatened to impose high taxes on these imports, and attacked the oil states and OPEC in his festivals and media meetings.

Personally, I have not been surprised by Trump’s actions and attitudes towards the oil industry, and I believe that he has a special hatred for this industry, which he has never invested in for personal and financial reasons. There are two articles on my English site that talk about Trump’s hatred of the oil industry and the impact of his tweets on oil prices. In one, pictures of pages from his book, published in 2011, demanded that OPEC and its countries be tried on charges of monopoly, demanding that their money be seized. What he wrote is a summary of what he believed during the 30 years before, and his hostility to the oil industry is proven in many interviews and writings. He also blamed the aviation industry’s bankruptcy on high oil prices and Gulf countries, as if he had only gone bankrupt this time.

Nevertheless, he tried to encourage the shale oil industry, but at the expense of investors who lost a lot of money, because this helps him politically in many directions, including tightening the screws on Iran and Venezuela, and putting pressure on the Gulf states. The United States has regained its historic position as the world’s largest oil producer, and has become one of the world’s largest exporters of oil, petroleum products, gas, liquefied gas and liquid gases. But, as I said, despite all this success, oil investors in his era achieved huge losses. Encouraging shale oil in this way is not in the interest of the Gulf countries. 

One of his plans was to revive the Key Stone XL project, which was suspended by President Obama for environmental reasons and with the support of environmental protectors, as Trump, after winning the presidential elections at the end of 2016, promised to support the project, which would transfer 850,000 barrels per day of Alberta oil In Canada to Cushing Complex in the state of Oklahoma, and from there to the Gulf of Mexico, where there is the largest concentration of refineries there.

This pipeline, if built, is also harmful to the Gulf states, and takes its share directly, not only in the United States, but in any country that can be exported to it through the Gulf of Mexico, due to the convergence of the quality of oil that the Gulf countries export to the United States with the resulting oil On the arrival of the tube to the Gulf of Mexico.

The arrival of additional Canadian oil into the Gulf of Mexico is beneficial to Americans in three ways:

1- American refineries obtain a desirable type of oil at a relatively low price.

 2- The United States exported more natural gasoline (a type of liquid gas that is produced in abundance from shale) to Canada to mix it with the oil sands to facilitate its flow and transportation.

 3- Mix it with very light oil to produce oils desired by refineries and achieve higher prices. This mixing process enables some refineries to produce oils to replace their imported counterparts from the Gulf countries. In short, this tube reduces the United States’ reliance on the Middle East and Venezuela.

Canadian oil between politics, environment and law

Last week, the US President’s plan suffered a painful blow from the Federal Circuit in the Ninth Circuit, which refused to freeze the decision of a lower court, which halted the process of accelerating the construction of the pipeline ordered by it.

The reason the Supreme Court supported the freeze decision is that the government and oil companies did not provide sufficient guarantees to prevent an environmental catastrophe in the pipes extending into the lake floor, which the tube will pass through. And legally, if the matter is not brought before the United States Supreme Court, then taking and returning between all the parties involved in the Ninth Circuit Court will take months, and here is another problem. The US presidential elections will be about six months from now, and the victory of Democratic candidate Joe Biden, who was Obama’s deputy, means a presidential decision to stop the tube, just as Obama did. And if Trump wins again, things will remain in the courts for a while, but it appears that they will end in the Supreme Court. Her endorsement of the pipeline means that it is a final decision, that he will be built, and Trump will achieve what he wants.

But even Biden’s victory and his complete completion of the pipeline does not necessarily mean that Canadian oil will not reach the market, as a large part of the amount that the pipeline will be transported will be transported by trains, and if the price differences are high, some will be transported by truck. The Supreme Court’s refusal of the pipeline, or Biden’s suspension of it, would encourage the Canadian government, perhaps with China’s help, in building the “Trans Mountain” pipeline, which would transport Alberta oil to Canadian ports in western Canada, and from it to the Asian markets, despite the opposition of environmentalists and indigenous peoples in British Columbia.

There is no doubt that the construction of the “Trans Mountain” tube will revitalize the Canadian oil industry significantly, and for decades to come, but it will change the balance of global trade, because it will compete with Gulf oil, especially Kuwaiti and Iraqi, in the Asian markets. 

In sum, Trump’s construction of the pipe harms the Gulf states, while Biden forbade him to its advantage, and Canada’s construction of the Trans Mountain tube is against its interest as well. The interesting thing is that the anti-oil environmental movements that stand in the way of the oil sands industry in Canada, and in the face of building any pipelines in it, help the Gulf countries market their oil without their will.