As Trump undoubtedly wags the dog through fomenting war with Iran (m.dailykos.com/...), he also is expanding the Brent-WTI spread (www.thebalance.com/...: “Brent refers to oil that is produced in the Brent oil fields and other sites in the North Sea. ... Its oil price is the benchmark for African, European, and Middle Eastern crude. The pricing mechanism for Brent dictates the value for roughly two-thirds of the world's crude oil production.“), benefiting US oil companies. This is a matter of geography and economics.
The Strait of Hormuz, located between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The Strait of Hormuz is the world's most important oil chokepoint because of the large volumes of oil that flow through the strait.
US oil companies are hurt by relative lack of hostilities. This past summer, it was observed:
Oil prices in August
Last weekend, the talks ended positively between the West and Iran. If the talks are successful, there could be more weakness in oil prices early in August. The security issues for tankers passing through the Strait of Hormuz added upside in oil.
Even before the assassination of the Iranian military leader, tensions were expected to have a “positive” effect:
Any conflict in the Strait of Hormuz could lead to a surge in oil prices. The Brent-WTI spread is also sensitive to the global oil supply. The Brent-WTI spread expanded after the OPEC+ production cut. Energy stocks, including ConocoPhillips (HES) and Hess , could rise with any expansion in the Brent-WTI spread.
Trump has unleashed a potential for war that benefits his domestic oil buddies. Timing is everything. The trick for Trump will be ensuring that he wins re-election before gasoline prices go up at the pumps enough to be noticed and before his Saudi partners tell him to stop:
Saudi is facing budget deficits of at least $50 billion on the year, and other attempts to raise funds - like the development of a $400 billion economic zone that has drawn only limited interest from international investors - have fallen flat.
According to three intelligence and security sources based in the region, these factors have limited the scope of Saudi ambition in the Middle East, and make the IPO effectively a move born of weakness rather than strength.
A clear sign were the attacks on Saudi oil fields this September, widely blamed on Iran and its proxies. The attacks saw 19 critical oil infrastructure targets simultaneously hit.