If he cannot arm-twist OPEC, he may unleash America’s Special Petroleum Reserve
.. markets are being buffeted by three countervailing forces unleashed by President Donald Trump:
- his geopolitical agenda, particularly sanctions on Iran;
- his domestic political agenda, to lower American petrol prices before the mid-term elections; and
- his looming trade war with China.
If he does not get his way, he may have a dangerous weapon up his sleeve—America’s Strategic Petroleum Reserve (SPR). His meddling risks making OPEC, the oil cartel that is a focus of his wrath, look like a paragon of predictability.
.. adding fuel to the price rally is the Trump administration’s pressure on America’s allies to cut oil imports from Iran to zero by November 4th, or face punishment for violating American sanctions. This is more draconian than expected.
.. on July 2nd that more than 50 international firms, including energy ones, had agreed to pull out of Iran. Though America may allow some countries—possibly Turkey, France and others—to reduce imports rather than cut them completely, it will not grant any waivers.
.. a “zero-barrel” response could see between 800,000 and 1.05m b/d of Iranian crude come off the market, with the squeeze starting in September, 60 days of shipping time before the sanctions kick in.
.. In an interview on Fox TV aired on July 1st, he ordered OPEC to stop manipulating the market, threatening some of its members with the loss of American protection if they do not.
.. the highest level of production Saudi Aramco, the state-owned oil giant, has tried out for any length of time is 11m b/d (it is about 10.3m b/d at the moment). But keeping production at that level for several months would damage its reservoirs. Pumping 12m b/d would also take spare capacity in the global oil market to uncharted lows, exposing it dangerously to supply shocks.
.. Complicating things is the imminent risk of an America-China trade war. China has threatened tariffs on American oil imports if retaliation meets more retaliation.
.. China may pay no heed to American sanctions on Iran, which would further stoke tension between the two.
.. These factors, some bullish for oil prices, some bearish, may offset each other. But they have already had the unfortunate consequence of putting Mr Trump alongside the rulers of Saudi Arabia and Russia in the driving seat of global oil policy. Shale producers, who cannot respond to price signals anything like quickly enough to please Mr Trump, are sidelined
.. Analysts predict that if petrol prices continue to rise ahead of the mid-terms, Mr Trump will use a release of up to 30m barrels from the SPR to flood the market. That would be tantamount to launching an oil war against OPEC and Russia, in addition to the trade war. But it cannot be ruled out.
Who Is Behind Trump’s Links to Arab Princes? A Billionaire Friend
The billionaire financier Tom Barrack was caught in a bind.
.. Mr. Trump’s outspoken hostility to Muslims — epitomized by his call for a ban on Muslim immigrants — was offending the Persian Gulf princes Mr. Barrack had depended on for decades as investors and buyers.
.. Mr. Barrack, a longtime friend who had done business with the ambassador, assured him that Mr. Trump understood the Persian Gulf perspective. “He also has joint ventures in the U.A.E.!” Mr. Barrack wrote in an email on April 26.
.. During the Trump campaign, Mr. Barrack was a top fund-raiser and trusted gatekeeper who opened communications with the Emiratis and Saudis, recommended that the candidate bring on Paul Manafort as campaign manager — and then tried to arrange a secret meeting between Mr. Manafort and the crown prince of Saudi Arabia.
.. Investigators interviewed him in December but asked questions almost exclusively about Mr. Manafort and his associate Rick Gates
.. he has said he rebuffed offers to become treasury secretary or ambassador to Mexico.
.. He sought a role as a special envoy for Middle East economic development
.. Mr. Barrack’s company, known as Colony NorthStar since a merger last year, has raised more than $7 billion in investments since Mr. Trump won the nomination, and 24 percent of that money has come from the Persian Gulf — all from either the U.A.E. or Saudi Arabia
.. Mr. Barrack played as a matchmaker between Mr. Trump and the Persian Gulf princes.
.. “He is the only person I know who the president speaks to as a peer,” said Roger Stone, a veteran Republican operative who has known both men for decades. “Barrack is to Trump as Bebe Rebozo was to Nixon, which is the best friend,”
.. By 2010, he had acquired $70 million of the debt owed by Mr. Trump’s son-in-law, Jared Kushner, on his troubled $1.8 billion purchase of a skyscraper at 666 Fifth Avenue in New York. After a call from Mr. Trump, Mr. Barrack was among a group of lenders who agreed to reduce Mr. Kushner’s obligations to keep him out of bankruptcy.
.. Thomas J. Barrack Jr. and Donald J. Trump first met in the 1980s, and Mr. Barrack got the better of the encounters. He negotiated Mr. Trump into overpaying for two famous assets: a one-fifth stake in the New York department store chain Alexander’s in 1985, and the entire Plaza Hotel in 1988. Mr. Trump paid about $410 million for the Plaza and later lost both properties to creditors.
.. But Mr. Barrack nonetheless parlayed the deals into a lasting friendship, in part by flattering Mr. Trump about his skill as a negotiator.
“He played me like a Steinway piano,” Mr. Barrack recounted in a speech at the Republican convention.
.. people who know him well say he still tells new acquaintances that he is truly honored to meet them, cheerfully doling out superlatives like “first-class,” “amazing” and “brilliant.” He invariably tells the story of his own success as a parable about luck and perseverance, never about talent.
.. He grew up speaking Arabic as the son of Lebanese immigrants to Los Angeles
.. Mr. Barrack wrote back that Mr. Trump was “the king of hyperbole.”
.. “We can turn him to prudence,” Mr. Barrack wrote in an email. “He needs a few really smart Arab minds to whom he can confer — u r at the top of that list!”
.. Mr. Barrack had befriended Mr. Manafort in the 1970s, when they were both living in Beirut and working for Saudi interests.
.. Early in 2016, when Mr. Trump faced the prospect of a contested nomination fight at the Republican convention, Mr. Barrack had recommended Mr. Manafort for the job of campaign manager. “The most experienced and lethal of managers” and “a killer,” Mr. Barrack called him in a letter to Mr. Trump.
.. The Saudi prince had tried to reach the Trump campaign through “a midlevel person” at the rival private equity giant Blackstone
.. Mr. Barrack forwarded to the ambassador a message from Mr. Manafort with a “clarification” that modulated Mr. Trump’s call for a Muslim ban.
.. Mr. Barrack informed Ambassador Otaiba that the Trump team had also removed a proposed Republican platform provision inserted to “embarrass” Saudi Arabia. The provision had called for the release of redacted pages about the kingdom in a report on the terrorist attacks of Sept. 11, 2001.
.. When those two states imposed an embargo on their neighbor Qatar — home to a major United States air base — Mr. Trump broke with his own administration to throw his weight squarely behind the Saudis and Emiratis.
.. Until recently, Mr. Barrack’s most prominent Gulf customers were neither the Emiratis nor the Saudis — but their bitter rivals the Qataris
.. None of the Gulf investments that Mr. Barrack’s company has brought in since Mr. Trump’s nomination have come from Qatar.
Trump’s Reckoning Arrives
The president’s unpredictability once worked to his advantage—but now, it is producing a mounting list of foreign-policy failures.
.. Trump’s election jolted almost every government into a frantic effort to understand what to expect. Other countries’ uncertainty enhanced Trump’s relative power—and so, perversely, did Trump’s policy ignorance and obnoxious behavior.
.. presidents are surrounded by elaborate staff systems to help them—and oblige them—to think through their words and actions.
If we impose tariffs on Chinese products, how might they retaliate? What’s our next move after that?
If we want to pressure Iran more tightly than our predecessors, what buy-in will we need from other countries? What will they want in return?
What do we want from North Korea that we can realistically get?
Team Trump does not engage in exercises like this.
.. Team Trump does not do it because the president does not do it. His idea of foreign policy is to bark orders like an emperor, without thinking very hard about how to enforce compliance or what to do if compliance is not forthcoming.
The administration canceled the Iran deal without first gaining European, Chinese, Japanese, or Indian cooperation for new sanctions. Trump started a trade war with China without any plan for response to the inevitable Chinese counter-moves.
.. The U.S. has abjured its right to inspect Iranian nuclear facilities without any workable plan to impose global sanctions instead. India and China each trade more with Iran than with the entirety of the European Union—and neither is very vulnerable to U.S. pressure... First, because he talked so much and tweeted so much, he revealed much more of himself much earlier than other presidents. His ego, his neediness, his impulsiveness, and the strange irregular cycles of his working day—those were all noted and analyzed before any formal action of his presidency... for example, Australia, his offensive words had limited the ability of Australia’s democratically accountable leaders to cooperate with him... Second, foreign leaders have concluded that the shortest path to Trump’s heart runs through his wallet. Oil states such as the United Arab Emirates and Saudi Arabia have rushed to be helpful to the business interests of Donald Trump and his son-in-law Jared Kushner, seeking an advantage over regional rivals like Qatar. Authoritarian leaders who could hamper Trump-licensed businesses—like Turkey’s Recep Erdogan and Rodrigo Duterte in the Philippines—have exploited their perceived leverage, acting with apparent impunity... Third, Trump’s highly suspicious dealings with Russia before the election potentially put him at the mercy of countries in a position to embarrass him... Only 17 percent of South Koreans trust Trump to do the right thing.. At a time of relatively low military casualties and strong job growth, the president’s popularity at home roughly matches that of George W. Bush’s during the worst months of the Iraq war, 2005–2006, and Barack Obama’sduring the most disappointing months of the weak recovery from the recession of 2009.
5 Times David Pecker and The Enquirer Defended or Championed Trump
In the run-up to the 2016 presidential election, Mr. Trump was one of 17 candidates who vied to be the Republican candidate, and none of his opponents were safe from ridicule in The Enquirer.
In October 2015, a headline called Ben Carson a “bungling surgeon.” The article said he had potentially “butchered one patient’s brain.” A month later, an article called him a “disgraced doctor” with a “violent past.”
In June of that year, an article claimed that Jeb Bush, the former Florida governor, had cheated on his wife, citing unnamed reports that linked Mr. Bush to a “Playboy bunny-turned-lawyer.”
Hillary Clinton, the Democratic presidential nominee and a favorite target of Mr. Trump, took the brunt of the scorn. A September 2015 article, using information from “sources,” said the “desperate and deteriorating 67-year-old won’t make it to the White House — because she’ll be dead in six months.”
.. In February 2017, days after Michael T. Flynn resigned as Mr. Trump’s national security adviser, the tabloid claimed that Mr. Obama had a secret plot to impeach Mr. Trump. And as recently as March 2017 the tabloid continued to claim that Mr. Obama, who was born in Hawaii, was foreign born, even though Mr. Trump had since let go of the false birther theory that he long promoted.
.. The National Enquirer and its parent company have not only helped the president by denigrating others, but also repeatedly praised Mr. Trump, his decisions and his character.
In March 2016, for the first time in its 90 years, The Enquirer endorsed a candidate for president — Donald J. Trump.
.. Mr. Pecker traveled to Saudi Arabia. In January, he sought Saudi investors to help bankroll a possible acquisition of Time magazine, according to two people with direct knowledge of the matter. American Media disputed that. As Mohammed bin Salman, the crown prince of Saudi Arabia, arrived this month for a tour of the United States, Mr. Pecker’s company published a 97-page magazine about Saudi Arabia that glosses over troubling details about the kingdom.