As OPEC oil ministers prepared to meet in Vienna later this week, President Trump fired another twitter-shot across their bows. But it is his decision to slap sanctions back on Iran that is the real driving force behind the rising price of oil.
The U.S. president has accused OPEC of being “at it again” for the second time in as many months through his favored 280-character diplomatic channel. Quite what "it" is, he has never specified.
I am always a bit confused about what people actually mean when they accuse the group of artificially raising the price of oil. OPEC doesn't set it — and hasn't done so for more than 30 years.
Perhaps the president is railing at the fact that some members of the group have spent millions of dollars creating production capacity that they aren't using. Seen in another light, that surplus is a vital safety valve in the event of a sudden loss of supply — such as the one that occurred when U.S.-led forces invaded Iraq in 2003, or when Western-backed rebels overthrew Libya's Moammar Al Qaddafi in 2011. OPEC's spare capacity has been used to compensate for sudden supply disruptions more often than America's strategic petroleum reserve.
