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Phil Flynn

Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665

President Joe Biden thinks that Iranian oil or Venezuela oil is more virtuous than American oil. Reports suggest that the Biden administration is looking at ways to ease sanctions on Venezuela, allowing them to sell more oil and is giving Iran a path to flood global oil markets. Sanctions on Venezuela’s so-called “dirty oil” and Iranian oil might be allowed back on the market at the expense of U.S. energy jobs and producers. Iran, sworn enemy of Israel and the U.S., now says that it will start to comply with the nuclear accord to be released from nations that have crippled the Iranian economy. Iran’s President Hassan Rouhani said to a crowd that was shouting “death to America” that the West should restore the 2015 nuclear deal as the nation marks the anniversary of the country’s 1979 Islamic Revolution as reported by the AP.

Iran’s Rouhani says the “era of sanctions” is over and the agreement is the only way forward. “There is no other way for the world and the region,” Rouhani says during a televised speech in Tehran, “The only path is the path of diplomacy. The only path is the world’s agreement with Iran. God willing, we will be successful in this path.” Rouhani also says, “God was the one who toppled” former President Donald Trump, who pulled the US out of the nuclear pact and imposed sanctions on Iran. He says Iranians who resisted Trump’s pressures also were effective in the overthrow.

Of course the Iranians had the help of democrats that tried to sabotage President Trump with fake investigations about Russian collusion and the anger over the covid 19 response. Iran also hated President Trump because he got leaders in the Middle East to recognize Israel and reduce Iran’s power in the region and their spread of antisemitism. The United Arab Emirates, Sudan, Morocco, and Bahrain now recognize Israel and were motivated by the Trump Administration and inspired by diplomacy and the promise of either advanced weapons or diplomatic favors from the United States. Some of which the Biden administration is looking to reverse. This will allow Iran, that has been boxed in both economically and diplomatically, off the hook without having to change its pattern of causing turmoil in the region.

The Biden administration is looking at ways for Venezuela to sell more oil and import diesel to avoid a humanitarian crisis in the socialist destroyed county. VOA reports that experts are warning of a looming humanitarian crisis in Venezuela if Biden’s administration does not lift restrictions that are preventing the South American country from swapping its plentiful crude oil reserves for refined diesel fuel from abroad. With Venezuela’s refinery sector in disarray after years of mismanagement, the country has become increasingly dependent on imported diesel fuel to generate electricity and transport essential goods including food, medicine, and humanitarian supplies.

If the Biden administration does relent, there is no guarantee that the money will filter down to the people. The Maduro Regime may just keep the money to enrich themselves. In fact when it comes to socialism, it is all about the state, and the people are secondary. Human rights do not matter if the state is ok. Yet Venezuela may be let off the hook for humanitarian reasons.

U.S. crude prices are getting more support from Biden’s policies, raising the cost of oil and gasoline. Reuters reports, “Crude prices in North Dakota’s Bakken shale region have surged to their highest levels in about six months as producers in the region rein in output and amid doubt over the fate of the Dakota Access Pipeline, the main artery running oil out of the region. North Dakota is the second only to Texas in terms of U.S. oil-producing states, with about 1.2 million barrels per day (bpd) of output. Harsh weather in the region is restraining production and well completion, which had already been hampered by poor demand in 2020 caused by a coronavirus. Concern about how Biden’s administration will handle the Dakota Access Pipeline (DAPL), which can transport more than 550,000 bpd out of the Bakken, is also boosting prices. The possibility that the line could be shut down is prompting some producers to ask for higher premiums for their oil, fearing buyers may renege on agreements, dealers said.

Oil is also getting support from more signs of U.S. crude oil supply falling. The American Petroleum Institute reported that crude supply in the U.S. fell yet again this week by 3.5 million barrels. Cushing supply fell again by 1.378, million barrels. We did see a jump of 4.810 million barrels in gas supply but that has not stopped the retail price from rising yet. Distillates fell by 487,000 barrels. Oil upside risks abound. Big resistance near 5970. A close over $60.00 should signal a test of near $63.00. A close over $63.00, well, get ready for a parabolic run.
Phil Flynn

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