Big Plan: How Trump Can Crash Oil Prices

What does Canada have to do with it?

The team of US President-elect Donald Trump is preparing a large-scale plan for the energy sector, which will include the approval of export permits for new projects in the field of liquefied natural gas and an increase in oil production in the United States.

Is it possible to implement such a plan? Charter97.org addressed these and more questions to Oleh Belokolos, Director of the Center for National Resilience Studies in Kyiv, former Counselor of the Embassy of Ukraine to Canada and Kenya:

— Let me start with the fact that in recent years, OPEC+ countries are largely to blame for the fact that inflation was promoted, prices for essential goods increased. This has led to social upheaval and instability around the world. Particularly in Africa.

These world prices also affected the consumer basket in the United States, where prices for essential goods, gasoline, increased significantly. I will say that this is also the reason why many Americans voted for Trump.

Now he is preparing a plan on how to stop, stabilize these processes, and, possibly, reduce prices. This is, of course, more than one day's work, but, judging by the publications, work on such a plan has already begun. Nothing is impossible for the US if it really wants to.

They have a lot of opportunities here. This is a permission to export LNG, accelerating the issuance of licenses for the development of new oil fields in the United States, perhaps there will be a return to the famous Keystone XL project, which was actively developed at the time. I note that under Trump, he was very active, but in 2021 he was stopped.

What kind of project was it?

— We are talking about the construction of an extended oil and gas pipeline from the Canadian province of Alberta in the United States to the Gulf of Mexico.

The fact is that despite the fact that oil has been extracted in Alberta for a long time (since the late 1940s), deposits of both light and heavy oil continue to exist there, but above all there are deposits of so-called oil-containing bituminous sands.

In terms of reserves of these sands, Canada is on a par with Saudi Arabia's oil reserves. While working at the Embassy of Ukraine in Canada, I was in Alberta in their laboratory. So, the government of Canada owns a special technology, obtaining an extract of light oil from these sands.

Canada will seek access for its resources to the foreign market. It's very important to it Perhaps, here we will talk about resuming the project. This is all feasible with modern technologies and political will.

In general, this will serve as an argument in the dialogue with countries that pursue unfriendly policies towards the United States. It is clear who we are talking about, whose budget largely depends on revenues from the sale of oil and gas.

I note that LNG projects in the Russian Federation have already faced serious difficulties — literally in recent months. This is due to even tougher US sanctions. Now we are talking about making it clear, directly or indirectly, that the United States at least has its own arguments in this dispute.

— Earlier, Saudi Arabia threatened to increase oil production. Can Trump negotiate with Riyadh?

— Judging by Trump's first presidential term, I think that he will not negotiate with Saudi Arabia, but Saudi Arabia will now negotiate with Trump.

I think that a lot of people may regret that this is the result of the elections in the United States. In his last presidential term, he took a rather tough line in foreign policy, it had a calming effect on many people. Let's see what happens now.

— Do you think that with the price of oil at $40, Russia will not be able to wage war?

— We will be able to check this only if the price of oil is $40. The fact is that today Russia earns quite a lot of money also on the export of food, namely grain. On fertilizers. Nevertheless, arms exports have recently fallen significantly.

The world is disappointed with Russian weapons and the level of their technological development. In many ways, Russian technologies have remained, at best, at the level of the 80s of the last century. With the exception of some individual samples, which at one time were not even developed in the public sector, but are now being used, but this is also temporary.

At a minimum, we can say that the Russian economy will be dealt a significant blow. After all, these energy resources still largely continue to be sold for the currency that Russia needs to purchase smuggled semiconductors, finance agents abroad, and so on.

The fact is that they have not yet taken either sanctions, or "reprisals", or oil prices seriously. If this moment comes now, then in the Russian Federation, indeed, problems will increase.

It is necessary to take into account Russia's features. The economy of this vast country requires constant resources to function. And we saw that last winter in Transbaikalia whole cities froze at -30, no one could do anything.

If there is no constant inflow of funding in this area, then there may be serious problems. I served in the army in Transbaikalia and I will say that any failure (especially in winter) can lead to very sad consequences. These issues are all interrelated.

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