Feb 06, 2025
One of President Trump’s first orders of business following the initial burst of executive orders was to declare he would ask OPEC to ramp up its oil production to bring down prices. Trump pledged cheap energy to Americans, and he vowed to put a quick end to the Ukraine war, which, to him, would accomplish lower oil prices. Only OPEC had to agree—and it didn’t. It could be Trump’s very first reality check this term.
Trump was speaking at the World Economic Forum in Davos when he said he was surprised that OPEC producers hadn’t taken care of oil prices before the U.S. election in November. “You gotta bring down the oil price,” he said. “That will end that war. You could end that war.”
While plausible on the face of it, this argument is as questionable as the argument that sanctions are working and the Russian economy is in tatters—as evidenced by a 2024 World Bank update on major economies, in which it ranked Russia among high-income countries, and on a per-capita basis, at that, for the first time since 2015.
Yet there are bigger problems with Trump’s idea of having OPEC open up the taps to help him fulfill his campaign promise of cheap energy. For starters, the Saudi Crown Prince may be Trump’s buddy, but he’s got his own priorities, and funding his Vision 2030 is number one on the list—for which he needs higher—not lower—oil prices and continued partnership with Russia.
Then there is the domestic problem: low oil prices are not what U.S. drillers want to hear or see. In fact, U.S. drillers like prices where they are and would not mind seeing them go higher. In other words, Trump’s goals of cheaper energy and more U.S. oil and gas production are at direct and quite sharp odds with OPEC’s priorities. Friendship with Crown Prince Mohammed won’t help—because OPEC doesn’t care about politics. OPEC cares about the oil market.
Amena Bakr, head of Middle East Energy and OPEC research at Kpler, recently detailed the situation with Trump and OPEC in an analysis for Semafor, where she pointed out that OPEC did not respond to Trump’s calls for more production and is unlikely to ever consider responding favorably because “at its core, it remains focused on market management, not political posturing. That includes keeping Russia firmly inside the alliance to maintain maximum clout over global supply.”
This is certainly not something that the U.S. president would be happy to hear, but there is more than one reason for OPEC’s behavior. According to Bakr, in addition to Russia’s importance for the extended group’s clout over global oil markets, there is the matter of maintaining internal cohesion and unity. As she puts it, “member states are wary of any move that could be interpreted as bowing to Trump, particularly if it risks internal fractures or threatens the alliance’s independence and loss of members.”
In other words, OPEC has a very different agenda than Trump and is not going to do what he wants just because he asks nicely. Of course, this most likely means he’ll stop asking nicely at some point, but that is unlikely to change OPEC’s tack. Especially now that it seems Trump has finally found the time to craft his policy towards Iran, which quite unsurprisingly is a return to maximum pressure, aiming to squeeze Iran’s oil exports to zero with the stated aim of preventing the country from developing a nuclear weapon.
According to the International Energy Agency, the rest of OPEC has plenty of spare capacity to cover the potential loss of Iranian barrels. Yet, as usual, the International Energy Agency is quite selective in its observations. OPEC indeed has the spare capacity to offset the loss of Iranian crude supply. What it does not appear to have is the willingness. OPEC has repeatedly demonstrated that it would not follow anyone else’s agenda but its own. This means that the cartel would only start increasing production if it is satisfied with the trajectory of international prices. It really is as simple as that.
There is also an additional challenge, as represented by OPEC’s decision to drop the U.S. Energy Information Administration from its secondary source lists—the outlets it uses to count its oil production. OPEC also dropped Rystad Energy—a formerly pure-play energy consultancy that has, over time, acquired a pro-transition bias not dissimilar to the IEA’s. As for the EIA, the significance of OPEC’s move to drop it as a secondary source of production information does not spell anything good about Trump’s relationship with the cartel.
“Opec probably now sees the EIA as a [direct] US government agency,” one former OPEC official told the Financial Times. “Its numbers were not particularly different from the other monitors, perhaps a little bit higher on the UAE’s production,” the official added, noting that “No one really believes the monthly Opec outlook [production numbers] at this point, though.” Yet they probably would believe energy data analysts such as Kpler, OilX, and ESAI, which OPEC is taking on as secondary sources.
Trump’s relationship with OPEC, then, is going to be rather complicated during his second term. The sooner the new U.S. administration acknowledges the realities of the situation, the easier it will be to cultivate a new relationship on a more equal footing.
oilprice.com
- US President Trump has vowed to ask OPEC to ramp up production.
- Lower oil prices will not only impact OPEC, it will also affect US oil producers.
- OPEC has a very different agenda than Trump and is not going to do what he wants just because he asks nicely..
One of President Trump’s first orders of business following the initial burst of executive orders was to declare he would ask OPEC to ramp up its oil production to bring down prices. Trump pledged cheap energy to Americans, and he vowed to put a quick end to the Ukraine war, which, to him, would accomplish lower oil prices. Only OPEC had to agree—and it didn’t. It could be Trump’s very first reality check this term.
Trump was speaking at the World Economic Forum in Davos when he said he was surprised that OPEC producers hadn’t taken care of oil prices before the U.S. election in November. “You gotta bring down the oil price,” he said. “That will end that war. You could end that war.”
While plausible on the face of it, this argument is as questionable as the argument that sanctions are working and the Russian economy is in tatters—as evidenced by a 2024 World Bank update on major economies, in which it ranked Russia among high-income countries, and on a per-capita basis, at that, for the first time since 2015.
Yet there are bigger problems with Trump’s idea of having OPEC open up the taps to help him fulfill his campaign promise of cheap energy. For starters, the Saudi Crown Prince may be Trump’s buddy, but he’s got his own priorities, and funding his Vision 2030 is number one on the list—for which he needs higher—not lower—oil prices and continued partnership with Russia.
Then there is the domestic problem: low oil prices are not what U.S. drillers want to hear or see. In fact, U.S. drillers like prices where they are and would not mind seeing them go higher. In other words, Trump’s goals of cheaper energy and more U.S. oil and gas production are at direct and quite sharp odds with OPEC’s priorities. Friendship with Crown Prince Mohammed won’t help—because OPEC doesn’t care about politics. OPEC cares about the oil market.
Amena Bakr, head of Middle East Energy and OPEC research at Kpler, recently detailed the situation with Trump and OPEC in an analysis for Semafor, where she pointed out that OPEC did not respond to Trump’s calls for more production and is unlikely to ever consider responding favorably because “at its core, it remains focused on market management, not political posturing. That includes keeping Russia firmly inside the alliance to maintain maximum clout over global supply.”
This is certainly not something that the U.S. president would be happy to hear, but there is more than one reason for OPEC’s behavior. According to Bakr, in addition to Russia’s importance for the extended group’s clout over global oil markets, there is the matter of maintaining internal cohesion and unity. As she puts it, “member states are wary of any move that could be interpreted as bowing to Trump, particularly if it risks internal fractures or threatens the alliance’s independence and loss of members.”
In other words, OPEC has a very different agenda than Trump and is not going to do what he wants just because he asks nicely. Of course, this most likely means he’ll stop asking nicely at some point, but that is unlikely to change OPEC’s tack. Especially now that it seems Trump has finally found the time to craft his policy towards Iran, which quite unsurprisingly is a return to maximum pressure, aiming to squeeze Iran’s oil exports to zero with the stated aim of preventing the country from developing a nuclear weapon.
According to the International Energy Agency, the rest of OPEC has plenty of spare capacity to cover the potential loss of Iranian barrels. Yet, as usual, the International Energy Agency is quite selective in its observations. OPEC indeed has the spare capacity to offset the loss of Iranian crude supply. What it does not appear to have is the willingness. OPEC has repeatedly demonstrated that it would not follow anyone else’s agenda but its own. This means that the cartel would only start increasing production if it is satisfied with the trajectory of international prices. It really is as simple as that.
There is also an additional challenge, as represented by OPEC’s decision to drop the U.S. Energy Information Administration from its secondary source lists—the outlets it uses to count its oil production. OPEC also dropped Rystad Energy—a formerly pure-play energy consultancy that has, over time, acquired a pro-transition bias not dissimilar to the IEA’s. As for the EIA, the significance of OPEC’s move to drop it as a secondary source of production information does not spell anything good about Trump’s relationship with the cartel.
“Opec probably now sees the EIA as a [direct] US government agency,” one former OPEC official told the Financial Times. “Its numbers were not particularly different from the other monitors, perhaps a little bit higher on the UAE’s production,” the official added, noting that “No one really believes the monthly Opec outlook [production numbers] at this point, though.” Yet they probably would believe energy data analysts such as Kpler, OilX, and ESAI, which OPEC is taking on as secondary sources.
Trump’s relationship with OPEC, then, is going to be rather complicated during his second term. The sooner the new U.S. administration acknowledges the realities of the situation, the easier it will be to cultivate a new relationship on a more equal footing.
OPEC to Trump: We Set the Price, Not You | OilPrice.com
OPEC has a very different agenda than Trump and is not going to do what he wants just because he asks nicely.
oilprice.com
