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Donald Trump just called for OPEC to lower oil prices:

We protect the countries of the Middle East, they would not be safe for very long without us, and yet they continue to push for higher and higher oil prices! We will remember. The OPEC monopoly must get prices down now!

—Donald Trump via Twitter (2018-09-20)

Well, oil-rich countries do pay billions for purchasing F-15, F-16, Patriots, and so on. They also support Petrodollar system. Apparently, the USA is actually protecting its superpower status by protecting Persian Gulf countries.

So, why is Trump calling for OPEC to lower oil prices?

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  • 5
    Is the question, "What is the basis of Trump's claim that the USA protects the OPEC nations?" If so, that could be answered with Kuwait.
    – Brythan
    Sep 21, 2018 at 0:58
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    That sounds a bit like a Mafia threat - "Nice oil pumps you have there, would be a pity if something happened to them ..." Sep 21, 2018 at 5:57
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    Trump also called OPEC a monopoly to further justify his claim. This if of course a bit silly given that the US is probably the largest oil producer this year, according to its own gov't data. So this is justified like many other things in the Trump universe: by alternative facts.
    – Fizz
    Sep 21, 2018 at 23:39
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    @Fizz You can be the single largest producer and still be dwarfed by a group of slightly smaller producers. OPEC certainly behaves more like a traditional cartel than a monopoly (which still would be illegal in modern societies), and I too find it hard to argue that 40% is a monopoly.
    – janh
    Sep 22, 2018 at 6:05
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    @userLTK It's not just Trump. Most people believe that cartels are harmful and should be illegal. OPEC openly engages in price fixing and artificially limiting supply. Were they companies and not states, they'd face antitrust actions in most countries on earth.
    – janh
    Sep 24, 2018 at 13:34

1 Answer 1

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Because he wants the USA to pay less for the oil it buys. The reason he is doing it in this manner is probably two-fold:

  1. He has a background in large business where it is common to put the squeeze on your suppliers
  2. He is not diplomatic at all (to put it diplomatically), as his myriad tantrums have shown. This explains why he has chosen the demand-and-threaten model.

Why OPEC? This is because it's the body which decides on output, and price directly to a certain extent. It's a cartel, and as such pretty much can force the price up or down.

As to whether cheap prices are really good for the US is a different question- self-sufficiency driven by higher prices and an acceleration to alternative technologies may very well be better for the economy in the long run.

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  • OPEC prices have a large influence on the general oil price, so "squeezing your supplier" means the prices you sell at will also suffer - the US aren't solely on the demand side, and the main supplier to the US appears to be Canada, not OPEC countries (albeit the margin is small).
    – janh
    Sep 23, 2018 at 9:14
  • @jahn, indeed my comments at the end re self sufficiency is in relation to US domestic production, although I did not make your excellent point explicitly.
    – user19831
    Sep 23, 2018 at 10:56
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    Reason C - His ego can not handle people pointing out gas prices were lower under Obama (regardless of whether presidents have any meaningful impact over that, or whether the higher prices generally are an indication of a robust economy). Sep 24, 2018 at 15:53
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    @PoloHoleSet As opposed to Obama stating that he would prefer the price to be $4.00. Trump wants lower prices at the pump, that bastard. Sep 24, 2018 at 19:23
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    @PoloHoleSet I would also guess he's trying to get anything positive to happen with the stock market going the way it is and Covid-19 looming over his head
    – GammaGames
    Mar 9, 2020 at 15:11

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