Daily Sabah (Turkey) - - Front Page - KEREM ALKİN

THE waivers ex­tended by the U.S. to eight coun­tries will also help U.S. con­sumers by pre­vent­ing the price of gaso­line from ris­ing less than an­tic­i­pated

Pres­ti­gious re­search in­sti­tu­tions in the U.S. point out that 68 per­cent of Amer­i­can vot­ers are highly sen­si­tive to the price of gaso­line. This is why it is very im­por­tant, es­pe­cially for Pres­i­dent Don­ald Trump and the Repub­li­can Party, that an as­sur­ance is given to U.S. vot­ers that the gal­lon price of gaso­line will not ex­ceed the $3 thresh­old in the short and medium term. It is quite mean­ing­ful that, Pres­i­dent Trump, while stat­ing that they are pre­par­ing a com­pre­hen­sive and rigid em­bargo pack­age for Iran, in­di­cated that they are re­frain­ing from an em­bargo that would com­pletely re­set oil pro­duc­tion to pre­vent global crude oil prices from es­ca­lat­ing. The price of crude oil, which had even been be- low $38 in the begin­ning of 2016, has de­creased the gal­lon price of gaso­line in the U.S. to $1.75. How­ever, from April 2017 to Oc­to­ber 2018, the money U.S. cit­i­zens spend per month on gaso­line in­creased by $4.4 bil­lion.

Even though the “glob­al­ist” struc­ture that has en­veloped Washington for the last 30 years sees the right to con­duct any po­lit­i­cal or mil­i­tary op­er­a­tions in any cor­ner of the world through the U.S. Depart­ment of State-Pen­tagon-CIA-U.S. Trea­sury Depart­ment quar­tet, the White House and the rul­ing party will lose the elec­tions the sec­ond they can­not man­age gas prices and unem­ploy­ment. This is why eight coun­tries, in­clud­ing Turkey, were ex­empted from the em­bargo for six months so that oil prices do not rise. Ma­jor Eu­ro­pean Union coun­tries, start­ing with France and Ger­many, are cov­ered by the em­bargo and have an­nounced that they will not com­ply. Turkey is see­ing the re­sults of its as­tute and de­ter­mined stance, hav­ing man­aged the cases of both pas­tor An­drew Brun­son and the Khashoggi mur­der very well, at the level of in­ter­na­tional diplo­macy, with Pres­i­dent Re­cep Tayyip Er­doğan’s strong lead­er­ship.

Pres­i­dent Trump is aware of the risk of in­fla­tion caused by the global trade war he trig­gered and the pos­si­ble reper­cus­sions of this risk on the U.S. econ­omy, as well as the fact that this may force the U.S. Fed­eral Re­serve to­wards a new rate hike. There­fore, for in­fla­tion­ary pres­sure in the U.S. econ­omy to not in­crease, the Ira­nian em­bargo must not be turned into a process that will raise global oil prices in the short and medium term. As to the at­ti­tude of Or­ga­ni­za­tion of Petroleum Ex­port­ing Coun­tries (OPEC) mem­ber coun­tries, we will ob­serve how they will act.

GAS AT $75 IN 2019

While dis­cus­sions and as­sess­ments of the Ira­nian em­bargo and the course of global oil prices re­main fresh, let us dis­cuss fore­casts for 2019 in par­tic­u­lar. Oil prices de­clined by 10 per­cent in Oc­to­ber alone fol­low­ing Pres­i­dent Trump’s stern re­ac­tion to OPEC on Sept. 20. Trump is aware that global in­fla­tion will rise due to the global trade war he es­ca­lated over the last year. Since ad­di­tional taxes on U.S. im­ports would nat­u­rally cre­ate in­fla­tion­ary pres­sure, Trump is try­ing to offset this pres­sure by eas­ing global oil prices and al­low­ing the sale of fuel to Amer­i­can cit­i­zens at rea­son­able prices.

In this con­text, we need to eval­u­ate the U.S. de­ci­sion that eight coun­tries will be ex­empted from Iran sanc­tions for a cer­tain pe­riod of time. By let­ting coun­tries that have shown sen­si­tiv­ity to the ex­pec­ta­tions of the United States, in other words, coun­tries that have de­creased oil im­ports from Iran, con­tinue im­port­ing oil for some more time, the U.S. has pre­vented global oil prices from ris­ing be­cause of the Ira­nian em­bargo for now. Mean­while, an­other rea­son for the U.S. to adopt a smooth tran­si­tional em­bargo on Iran could be to make Saudi Ara­bia, shocked by the “global reck­less­ness” scan­dal caused by the mur­der of Khashoggi, pro­duce more oil and close the sup­ply gap caused by Ira­nian sanc­tions.

The U.S. Depart­ment of En­ergy has es­ti­mated the av­er­age global oil price for 2018 as $74 and for 2019 as $75. We should not forget that on Jan. 20, 2016, the price of a bar­rel of oil was $26.55, a 13-year low be­fore coming up to to­day’s lev­els. Com­mod­ity ex­perts are di­vided in two be­tween es­ti­mates of oil prices fall­ing to $56 or ris­ing to $85 in 2019.

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