Prime Minister’s advisor rules out oil price collapse: Trump’s policy will not sacrifice petrodollar
Prime Minister’s advisor rules out oil price collapse: Trump’s policy will not sacrifice petrodollar
2024/11/14
The economic advisor to the Prime Minister, Mazhar Muhammad Salih, ruled out that the policy of US President-elect Donald Trump would “sacrifice” the petrodollar.
Saleh told Al Furat News Agency: “There are three restrictions that I find that prevent the deterioration of crude oil prices in the global market. The first is that the United States is still the largest oil producer in the world, and major American oil companies have invested in line with an oil price of no less than $70 per barrel, to cover the costs of producing shale oil at the break-even point.”
He added, “As for the second restriction, President Trump’s policy will not sacrifice the petrodollar to make the oil dollar a dollar supply that exceeds demand for it, at a time when the United States and its new foreign policy find themselves making the dollar the strongest currency in the world, within the framework of its dominance over the global economy. Therefore, the new American administration is keen for the dollar to present itself again and for demand to exceed supply. Therefore, the weakness or deterioration of petrodollar revenues only means a weakening of the global oil currency and the basis of the dollar’s dominance.”
Saleh continued, “As for the third restriction, the deterioration of oil prices will allow China, the largest oil importer in the world, to obtain cheap energy resources, which is inconsistent with the economic competition between China and the United States in dominating the sources of growth and economic power in the world.”
He pointed out that, “In light of the above, I find that the three above-mentioned restrictions are what will prevent the collapse of the oil asset cycle if it is about to happen, taking into account not being overly optimistic, which requires fiscal and monetary policies within the framework of preventive policies that mitigate the impact of international factors on stability and economic growth in our country.”
Economic analysts have warned of a sharp 40% drop in oil prices next year if the OPEC+ group abandons current oil production restrictions.
alforatnews.iq
