Topic: Brent Oil

President Trump held a call with Venezuela's interim president, Dulce Rodriguez, to discuss oil, minerals, and trade. While Chevron maintains a foothold in the country, Trump has reportedly told Exxon Mobil they will not be part of the new Venezuelan oil deals. The segment also notes the low price of West Texas Intermediate (WTI) oil compared to the heavy sour Brent crude typical of Venezuela.

A technical discussion on oil quality contrasts Venezuelan "heavy sour" crude with Algerian Saharan crude, which is noted for its low sulfur content and high API viscosity. The Algerian oil is described as so pure it can almost be used as diesel fuel directly from the ground. This highlights the logistical challenges of refining lower-quality Venezuelan oil compared to premium global crudes.

Global oil prices tumbled by over 10% following the implementation of a ceasefire between Israel and Iran. Brent crude dropped below $68 per barrel as concerns over a potential blockage of the Strait of Hormuz dissipated. While oil prices fell, Wall Street indexes rallied, with the Dow Jones gaining 530 points.

Political critics blame President Biden for the conflict, citing the release of $6 billion in Iranian funds and the abandonment of $80 billion in military equipment in Afghanistan. Despite the regional instability, global oil prices remained relatively stable at $82, which is noted as unusual for a Middle Eastern war. Speculation arises regarding whether the lack of market movement indicates a planned operation or a desire to keep prices low for strategic reasons.

Gas prices in the U.S. are rising at the fastest pace in history, with the national average nearing $4.00 per gallon. Brent crude and WTI oil prices have surged to over $115 per barrel. Additionally, Russia is cutting off fertilizer supplies, which is expected to have a severe impact on global food production and prices.

Steve Pieczenik continues his analysis of Mohammed bin Salman's financial struggles, noting the Prince's failed attempts to diversify the Saudi economy through investments in high-tech and entertainment. The discussion highlights that the U.S. can replace Saudi supply deficits almost instantly with West Texas Permian oil. The hosts conclude that the recent market spike was a "nothing burger" that failed to sustain higher prices.

Former CIA Deputy Director Mike Morell argued that Iran attacked the tankers to pressure the world into easing sanctions by raising oil prices. However, critics note that the price of oil did not spike significantly and the attacks seemed "lame" or incompetent if they were intended as a major provocation. The segment explores the possibility that the incident was a failed "op" or a simple money grab.

The Chairman of Pioneer National Resources discusses the impact of trade sanctions and steel tariffs on the U.S. oil industry. While the U.S. is on track to produce 15 million barrels a day by 2026, tariffs on foreign steel are raising the cost of piping by up to 30%. Additionally, the potential for Chinese tariffs on U.S. oil exports—currently at 300,000 barrels per day—poses a risk to the market.

Oil prices drop below $30 per barrel, driven by oversupply from U.S. shale and the re-entry of Iran into the market. Saudi Arabia's refusal to cut production is explained as a strategic move to protect market share, a lesson learned from their failed attempts to fix prices in the 1970s.

The hosts place "Red Book" bets on the bottom of the oil market, with predictions ranging from $13.50 to $24.00 per barrel. They warn that while the current situation is a correction, a much larger and more "frightening" economic event is forecasted for 2017.

CNBC coverage of rising oil prices highlights the role of electronic trading and algorithms in driving Brent crude over $120. Analysts suggest that the market is small enough for large funds to manipulate prices using automated systems, regardless of actual supply and demand.