Oil prices ‘high’ because of political tensions

Oil-producing nations in the Middle East and Africa said current crude prices at $125 a barrel are “high” as a result of international political tensions.

Crude prices are “on the high side,” Mohamed Al-Hamli, oil minister in the United Arab Emirates, said today in Kuwait at a meeting of the International Energy Forum. International politics are pushing up oil prices, Angolan Oil Minister Jose Maria Botelho de Vasconcelos said. His country would prefer to see Brent oil at $110 to $115 a barrel, he told reporters as he arrived in Kuwait.

Brent crude has gained 17 percent this year in London to more than $125 a barrel, mainly on concern that a conflict involving Iran may choke off exports from the Persian Gulf and limit market supplies. Oil surged last year after a revolution in Libya stopped exports from the North African country.

The IEF is a gathering that takes place every two years where government and company officials from producing and consuming nations meet to discuss issues that will determine future supply and demand in the global market. Oil-consuming nations are trying to sustain growth in the face of rising crude price, while producers seek to supply at a price that will balance their national budgets without hurting demand.

Strait of Hormuz

Iran is seeking outlets for its oil after U.S. and European sanctions cut off transactions with the country’s banking system to pressure the Islamic republic into reining in its nuclear program. The country has threatened to shut the Strait of Hormuz, a transit point for a fifth of oil traded worldwide, if sanctions are imposed on its crude exports.

State-run Kuwait Petroleum Corp. has a contingency plan if the strait is closed, Chief Executive Officer Farouk Al-Zanki said today in Kuwait, without providing details. Demand for the company’s crude oil “still looks good,” he said.

Prices are “a bit high” and should be at $100 a barrel, Mohammed Al-Rumhy, Oman’s oil minister, said in an interview at the IEF. The sultanate will produce an average 900,000 barrels a day of crude and condensate this year, little changed from the end of last year, he said.

Kuwait pumped about 3 million barrels of oil and condensates a day last month, Al-Zinki said. The U.A.E. produced 2.6 million barrels of oil a day in February, Al-Hamli told reporters. Angola is currently producing 1.7 million barrels of oil a day, according to Botelho de Vasconcelos.

Members of the Organization of Petroleum Exporting Countries boosted supplies last year during the Libyan conflict to meet demand. The 12 members of OPEC, which pumps 40 percent of the world’s oil, are Algeria, Angola, Ecuador, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates and Venezuela.

20 Comments

  1. Dollar

    Duh !!

    Hey, breaking news ……. The USA is vulnerable to geopolitical events in oil producing regions of the world.

    One more time, because its been a proven fact for a long long time, many years that…….

    THE USA IS VULNERABLE TO GEOPOLITICAL EVENTS IN OIL PRODUCING REGIONS OF THE WORLD

    Everybody got that now ???

    Then why has it been ignored by the current president ?

    Why is there such a shock when we get a price spike when events occur ?

    Why did Obama put dealing with Iran on the back burner ? He’s now exactly in the same spot George Bush was at in June , 2008. No progress has been made.

    And why is Obama now saying there’s ” no quick fixes ” , when everybody has known , for years and years, that …..

    THE USA IS VULNERABLE TO GEOPOLITICAL EVENTS IN OIL PRODUCING REGIONS OF THE WORLD.

    Why has he not been working on this from his first day in office instead of placing his concern on CO2 emissions and promoting an energy policy designed for thirty years from now, instead of the present?

    Not Obama’s fault, yeah right.

    #1
  2. txloanguy

    If we dumped 10 million barrels a month on the market it would affect the prices. Tell that to Obama. He either doesn’t understand that or doesn’t care. I go with doesn’t care.

    #2
  3. Goldwinger2008

    Just look at how desperately the liberal media is trying to clear Obama from the quagmire of rising fuel prices. It’s laughable. When Bush was in office, the same media blasted HIM for it. Now, they take the exact opposite tactic. They’ve even had schizophrenic articles here in the Chronicle. One article had an Exxon guy saying that gas prices wouldn’t reach $5/gal. even though, in some parts of the country, they’re getting very close. In another article on the same day, they said that the Chevy Volts sales should improve because of rising gas prices. That IS the aim here… get the gas prices up so that we’ll stop driving so much and buy cars like the Volt.

    They did the same thing with the economy too. When unemployment was at record lows, the media kept bashing the economy. Now when we see record high unemployment, the same media touts anything said about “recovery”. In this very same edition of the paper, they tout that the fed says that the economy is improving with more jobs added since January. Trouble is, that’s not true. Jobs were LOST in February. The media loves to scream out the initial numbers about jobs but won’t print the “revised” (true) numbers.

    #3
  4. tsujones

    why do we never see a article about the 60 cent per gallon of gas tax we are paying to speculators and commodity traders on wall street.? That’s 60 cents per gallon of gas not barrel of oil.

    #4
  5. onevois

    whatever

    #5
  6. yellow journalism lives

    Obama’s domestic policies are not the most detrimental element to keeping energy costs down. While not all of the international disputes involved here are directly this POTUS’s fault, his hodge podge Mid-east policy is starting to cost us dearly! The domestic policies will be the reason oil is even higher a couple of years from now!

    #6
  7. PSI - Obama

    just send me a free campaign tire gauge.

    #7
  8. Algaebama

    let’s see,

    should I drink my algae milkshake or put it in my gas tank?

    #8
  9. PainAtThePump

    I believe him when he says he can’t do anything about the price of gasoline.

    he’s just a sockpuppet for Soros.

    #9
  10. willrogerstx

    Funny how when oil prices rose when Bush was President, it was the markets fault.
    Now that Obama is President, it is all his fault.
    Just like the recession did not start till President Obama was sworn in.

    #10
  11. Paul

    Dollar, why won’t we just go forward with an energy policy “designed for 30 years from now” right now? Or better yet, why haven’t we already done so over the last several decades by now? Other parts of the world (with not nearly the wealth of this country) are getting their electric needs day and night on solar power alone. We should be using solar and wind to power as much of our electric “needs” as possible. Transportation is a different animal, and for that we should be investing in hydrogen power, and we should also be building high speed rail systems all over the country at this point. We’ve had the technology for decades. It doesn’t corrupt our health, our environment or our ecosystems. There is an abundant, infinite supply that we don’t have to dig miles into the ground to “get to.” We don’t “have to” go into other parts of the world and do business with terrorist regimes, or for God’s sake, get involved militarily with them. Of course, tell that to our politicians every time they get “contributions” from the oil and gas industry…which is wealthier than ever at this point. Exxon alone is making well over $100 million in profits every day right now. We don’t need oil or gas like we’re almost constantly led to believe by our “biased liberal” media. They are undeniably more and more detrimental to society…and in numerous ways…every day. And don’t get me started on the auto industry and all of ITS baggage as well…

    #11
  12. Sunshine State

    @ tsujones

    I agree. Do you know the history behind that number? I’d like to know why we’re paying that much per gallon. Also, why are we paying for distribution and marketing? One more question, do any of you know a website where I can find the markup a local gas station imposes on the gas price?

    My knowledge of gas pricing is very limited (next to nothing). However, given our dependence on oil, I’d say we need a comprehensive energy policy that severely lessens or removes that dependence.

    #12
  13. SaltWaterCroc

    It’s all Obama’s fault! Pay no attention to the speculators running up the price of oil (which they do for every event, from a sheik’s sneeze to a hurricane in the Gulf). For the top 1%, to the top 1%. Follow the money. When you allow Vegas betting on oil futures, this is what happens.

    #13
  14. BarksintheCountry

    So, it is not Cheney and Halliburton, but ‘politics’. We have the most devisive, corrupt politician in the White House. Therefore, obama is at fault. Will voters remember this in November?

    #14
  15. Dan X. McGraw

    Sunshine State, gasoline prices are impacted by four things — Taxes, Distribution & Marketing, Refining and Crude Oil. Crude oil accounts for around three-fourths the price of gasoline. At the current crude oil prices, refiners make very little money and have very little impact on the price of gasoline — around 6 percent. Taxes and distribution/marketing are around 18 percent. EIA gives a good break down of the costs: http://www.eia.gov/petroleum/gasdiesel/

    #15
  16. Libs R Dumb

    TSUJones-
    I was unaware companies could levy taxes in the U.S. Geez, think you need to attend a real school.
    Psssssst…. Let me tell you a secret, it’s that idiot in the White House you voted for that could do something, i.e. quit implementing anti production policy in the U.S. as well as quit blowing our tax dollars on failed green companies.
    If we produced and refined more here we wouldn’t be as subject to the rest of the world’s actions when it comes to fuel prices.

    #16
  17. Bart-1

    Aw Come on Barks, Most Corrupt politician? That is a stretch. Now, granted this country is more divided than its ever been in my lifetime, but as long as the media and folks like Dan X continue to spin that even though Obama claimed the $4 a gallon gas WAS Bush’s fault and now at every $38K a plate campaign fundraiser (what is it now 194?) he claims “It aint my fault” he will be given a pass by those on the left this election.

    #17
  18. Ivy Leagr

    @Paul
    What foreign countries are generating their “electric needs day and night on solar power alone”? Oh wait, you won’t be able to answer that as they do not exist. Yours are simply baseless comments from someone living in a fantasy world. And really…high speed rail? Have you heard about the debacle that has been going on in California for the past few years? Both the state of California and the federal government have been throwing taxpayer funds at that money pit and have what to show for it…an initial construction completion date years off connecting Merced to Bakersfield? What a hot bed of high speed travel that will be. Your solutions to energy needs are not economically feasible and unfortunately the current sources such as O&G do not align with your political/environmental/social views.

    #18
  19. Newsworthy

    Oil prices are high because the speculation of oil is allowed and is easy. Speculators ‘use’ these tensions to manipulate prices to raise prices. These tensions or ‘fears’ have not manifested into shortages and have only allowed the transfer of our wealth to foreign countries that are selling heroin and promoting terrorism.

    That America doesn’t produce our own oil for our own consumption is delorable. This policy is making all of us poorer and is robbing us of our savings and any chance for retirement. But that’s the Obama plan as it will make a lot of people dependent on the government.

    More than ever America needs to wake up and vote this president out of office and undo all the damage he has wrought on America. More than ever, we need to decide that we will either live by our laws or that our country will continue to decline.

    Those that come here illegally need to realize that the reason they came here was because America has a lot to offer but to continue to come here and take will collapse the system and they won’t have anything and they might as well go back to their deplorable country they have allowed to decline.

    #19
  20. Paul

    Ivy Leagr, google is your friend…but apparently that’s “asking too much.”

    First of all, I SAID “other parts of the world”…not entire “foreign countries.” Anyways, here is one example of a solar power plant in Spain that provides 20MW of power day and night (which can provide electric needs for 20,000 homes) at a total cost of about $325 million…or about $16,250 per home. After about 15 years, that will translate to saving money compared to using non-renewable energy. What’s the hold up here in America?

    http://www.cnn.com/2011/10/03/world/europe/solar-power-24-hours/index.html

    Here is another that provides 50 MW of power:

    http://www.guardian.co.uk/environment/2010/jul/13/spain-solar-power

    There are several more solar plants in Spain, and solar power there now accounts for more output than the U.S.

    Regarding high-speed rail…you’ve got to be kidding me if you honesty think it’s more “economically viable” to haul masses of people in personal automobiles on roads than by well-planned and well-built combinations of low and high-speed trains. Do you really “think” that things like oil and gas consumption, car payments, insurance, traffic laws and citations, parking fees, toll roads, traffic lights, traffic signage, criminally negligent construction practices, political costs (starting wars and doing business with terrorist regimes), environmental and health costs from pollution, road rage, road kill, thousands of square miles of unnecessary land used for parking lots, driveways, multiple lane roadways with shoulder lanes, etc (that’s basically why so many of our cities extend 30 to 50 miles outward in every direction)…accidents that kill over 30,000 Americans each year (there are roughly 250 “major” accidents every DAY in the Houston area alone (“major” being defined as at least $1,000 in damage, injury or loss of life)…with about 3 times as many “minor” ones…etc. (I can go on and on) are some sort of “model of efficiency” or economic stability? The oil/gas and auto industries (along with the type of construction and insurance baggage that “comes along” with them) are an elephant in the room regarding why Americans are overworked, unhealthy and broke. Most of these costs are not factored in when considering the OVERALL PRICE we pay…much less the time we spend in our automobiles and on our roads.

    You can bring up bad examples of high-speed rail in the U.S., and it’s quite obvious that we’re not exactly taking that issue seriously here…especially given your example…but at the same time, I can give you about 100 examples off the top of my head here in Houston alone of ROAD construction projects that words cannot describe. It took about 10 years to “complete” a 3 mile stretch of San Felipe. How long will it take for them to “get around” to the worst (they always seem to save the area in worst shape/most need for last) part of Kirby between 59 and Bissonnet? That’s 3 blocks worth of road that they have neglected, even though they reconstructed Kirby (again…over several years) from Allen Pkwy to 59, and then from Bissonnet to Holcombe.

    Your example of high-speed rail says a lot about how serious we are taking this issue. That being said, why you would use that rail project in California to dismiss the notion for high-speed rail in America, as if 1) we shouldn’t build high-speed rail because of that, or 2) the notion that more cars/roads/etc. is sustainable? We should be building a high speed rail system in this country similar to how we built our current interstate highway system…and then fill in larger cities and towns with well-planned and well-built mixtures of low-speed and commuter trains. It’s not exactly “rocket science.”

    You’re right about one thing…O&G do not exactly “align” with my politicial/environmental/social views. Unfortunately, the O&G industry (along with the auto/insurance/construction industries) has our politicians and media in their hip pocket…as much as they want to make it seem otherwise…and whether or not the average American realizes it, our environment and society are regressing substantially as a result. That said, I’d be willing to wager that most Americans don’t exactly feel like they’re “reaping the benefits” from cars, roads, oil and gas…and ALL of the baggage that accompanies them.

    #20