On the last Tuesday, it's a kind of surprising thing knowing that the oil prices came back to the lower level after it turned to its highest level of price. It's because Donald Trump, the US President, started to push the Organization of Petroleum Exporting Countries (OPEC) to increase its oil production to fulfil the world needs of crude.
There's a reason why it happened. It's because he decided to tighten the US punishment toward Iran, for stopping its oil export to other countries. The US tends to push Iran crude export to reach the zero level as the punishment. But then, the derivation of oil prices brought impact for the US.
This is the Impact for the US When Oil Prices Decline
The downtrend of the oil prices this week has definitely brought the impact on the US oil stock. It was clear that because of the oil prices which was getting lower, it increases the oil stock in the US. It was not really in a normal way, because it was definitely reached the record. It's higher than it was expected.
The US crude oil stock was 6.8 million barrel at the beginning, but then it turned higher as much as 466.6 million barrel in a week on April 26, 2019, based on the American Petroleum Institute (API) data. Then, the data told us that in the last week, the US oil stock was increasing more.
It was from 9.9 million Barrel to 470.6 Barrel. And this is the highest level since September 2017, because it was noted to 12.3 million barrel per day. But on another side, the Energy Information Administration (EIA) told us that the distillation of the oil was decreasing since the last Wednesday.
Situation of the World Oil Market
Despite the US oil stock has increased to its highest level that pushed the world oil prices more to be lower, but the situation of the world oil market is not that stable and normal as it supposed to be. Especially in Venezuela where there was a political conflict between the president and the opposition party.
There are protestants and demonstrate gathered to be a team who were supporting the opposition party to beat up the president of Venezuela. This situation actually became the reason which triggered the ups and downs of the world oil market. Many observers said that it may impact the market oil dynamic in Venezuela.
The political conflict that happened in Venezuela was going to bring impact to the crude oil supply. It was not impossible if the protestant and the demonstration we're going to do a harsh thing during the demo and will definitely affect the oil supply itself. As we know that Venezuela is one of the OPEC members which provided crude oil.
Did the US Bring An ‘Amnesty' to Iran?
Actually, the punishment given by the US to Iran about shutting down the oil export from Iran has not over yet. It was getting stronger and more strict towards Iran. The US planned to drive the oil export from Iran to be zero. Means that there is no more country is going to become their consumer.
This situation keeps on pushing OPEC to produce more and more oil in order to fulfil the countries' needs for crude oil. Meanwhile, OPEC has a higher responsibility which is to keep the crude oil supply in order to keep the oil price to stay normal and will not be higher as it happened before, and not too cheap.
But on another side, we still couldn't guarantee that Iran's oil consumer will obey the rule from the US. Whether they still buy the oil from Iran, or even they turned to import oil from the OPEC which definitely unstable and full of risks. But we will see what will happen on the future ahead.