So, what is this thing between President Trump and Mr. V. Putin? Trump obviously likes compliments. Vladimir is a former KGB leader who seems like such a sincere guy. He certainly wouldn’t flatter a U.S. President merely for political or economic gain. But maybe Trump and his team of advisors know exactly what they are doing. Whenever there is a high-stakes international conflict, oil is often a factor.
Putin wants the U.S. sanctions against Russia lifted. The economic sanctions were first imposed by President Obama in 2014 after Russia’s oil pipeline-connected invasion of the Ukraine and the annexation of Crimea. Russia has huge oil reserves, many that are more accessible now that Artic ice is melting, and the faster the ice melts, the easier the oil is to access. Exxon Mobil leases 60+ million acres in Russia. By comparison, it leases 17 million acres in the U.S. So Russia and Exxon will both benefit when the sanctions are lifted.
Coincidentally, former Exxon Mobil chief executive, Rex Tillerson, is now the American Secretary of State. Oil advocates Rick Perry, Jeff Sessions and even new Environmental Protection Agency chief, Scott Pruitt, are also in Trump’ cabinet.
The links between the Russian Exxon oil deal, the alleged hacking of our democratic voting process and Trump’s oil-friendly cabinet are more than disturbing. If you want to explore this further, just Google “Russian Oil Deal” or “Rosneft Oil” and take your pick of sources.
You would think Republicans would like the Russian sanctions, but not with Donald Trump in office. Could you imagine Republican outrage if President Hillary Clinton would have suggested lifting the sanctions: “Commie!” “Traitor” “Ruski Feminist!” If The Russians had aided Hillary Clinton’s campaign, an independent investigation and impeachment proceedings would already be in progress.
As this political drama evolves, the price of oil and gasoline will be interesting to observe. In early November the price per barrel was $45.28* and by January it was $53.63, a huge jump. Gas prices changes lag behind oil prices. Sacramento gasoline prices were about $2.60 per gallon** in early November and are at about $2.85 now. Here are some sites to follow gas and oil price trends.
Note: These Russian photos were taken during a fabulous trip I took in 2007. To the best of my knowledge, I did not meet with any Russian operatives on behalf of the future Trump campaign.
These are the opinions of Bob Dreizler and not necessarily those of Cambridge or any other organization, are for informational purposes only, and should not be construed or acted upon as individualized investment advice.