Alaska oil price yawns at threat of 'World War III' - Must Read Alaska
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Sunday, June 7, 2020
HomePoliticsAlaska oil price yawns at threat of ‘World War III’

Alaska oil price yawns at threat of ‘World War III’

The global oil markets reacted ever-so-slightly to the military tensions in the Middle East.

After Iran and the United States shared their thoughts with each other through missiles in recent days, the threat of major conflict boosted prices to over $70 a barrel.

Even the “World War III” scenario painted by MSNBC, CNN, and House Speaker Nancy Pelosi only pumped the price up by a smidgen.

Brent oil contracts, the global benchmark reached $70.74. Alaska North Slope crude will likely trade in the mid-70s today. The ANS price on Monday was $70.51; (Tuesday’s and Wednesday’s prices are not yet available, check back, this will be updated.)

Higher energy prices, now that the United States is an net exporter of petroleum products, may serve to stimulate the overall national economy, although it will also lead to higher heating oil and transportation costs in Alaska.

TRUMP TALKS TOUGH

Today, President Donald Trump reiterated the importance of the U.S. having not only a strong military, but a strong economy. In a speech at the White House, he said that for too many years the world has tolerated Iran, which he called the largest exporter of terrorism in the world.

In May of 2018, Trump announced that the U.S. would pull out of the Iran nuclear agreement, formally known as the Joint Comprehensive Plan of Action (JCPOA). Trump called the nuclear “a horrible one-sided deal” that should have never been made and said the U.S. would not be held hostage to “nuclear blackmail.” 

Today, he said that the “foolish” deal that President Barack Obama made, which sent $150 billion of U.S. taxpayer dollars to Iran, resulted in Iran using those dollars to send missiles out against its regional enemies and the United States.

“They chanted death to America the day the agreement was signed,” Trump said today. He said that the retaliation of Iran against the United States appears to have ended with the missile attacks on U.S. bases in Iraq — attacks that killed no one.

OIL PRICES BASICALLY STABLE

Alaska now knows what the world looks like under the great “brink of war” scenario — which is a slight uptick in price. It’s not likely to see prices go as far as $100 a barrel.

The price bump of the past few days doesn’t necessarily help the Alaska budget situation unless two big fields come on line — Pikka Unit (Oil Search) and Willow (ConocoPhillips), both of which don’t yet have a final investment decision from their respective companies.

Alaska needs that production to bail its state budget out, if the government is unwilling to trim back its spending.

But production won’t increase if the Our Fair Share initiative passes with voters this year. In fact, without those two fields coming on line, production will suffer from the dwindles.

It’s a new era for Alaska, as it only provides a fraction of the oil that is being produced in the United States:

Source: U.S. Energy Information Administration

That makes is more evident than ever that price will not bail out Alaska’s state budget, which receives 90 percent of its revenue from petroleum.

What can Alaskans do to boost production? Industry leaders say voters will need to stand on the throat of the Our Fair Share initiative, and tell the oil producers that investing in Alaska is a good business decision.

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Suzanne Downing had careers in business and journalism before serving as the Director of Faith and Community-based Initiatives for Florida Gov. Jeb Bush and returning to Alaska to serve as speechwriter for Gov. Sean Parnell. Born on the Oregon coast, she moved to Alaska in 1969.

Latest comments

  • Bring on the drones, hellfire missles, and Donald John Trump. All good for the price of oil and Alaska Democrats…..who just love the color of money.

  • New nickname for liberals, “Chicken Littles”.

  • There is no WWW 3 around the corner, unless you take into account the new wave of cyberattacks and environmental degradation spread across the globe.
    As for the middle east, the corporations control the economy and the U.S. is guarding the infrastructure that keeps the “black gold” flowing.
    As for Trump’s escalating the Iranians, it will assure instability in the region for many years to come – just what the military industrialized complex needs to thrive.

    • “As for Trump escalating the Iranians…” The region has been unstable forever. Current policies have little to do with the tribal and religious animosity and constant conflicts. At least the President isn’t sending planeloads of cash that fund terrorists like his predecessor did.

      • “At least the President isn’t sending planeloads of cash that fund terrorists like his predecessor did.”
        Well you should really say “predecessors” since the U.S. has been funding terrorists in the region for over 40 years.
        These “planeloads of cash” were under the watchful eye of both Blue and Red administrations in White House?
        “Operation Cyclone was the code name for the United States Central Intelligence Agency program to arm and finance the jihadists, in Afghanistan from 1979 to 1989, prior to and during the military intervention by the USSR in support of its client, the Democratic Republic of Afghanistan.”
        Who would have thought that the Islamist in Afghanistan would unite with millions of other Islamist in neighboring countries to turn on the U.S.?
        Let’s remember 1979 was also the first year Osama bin laden started his funding of the Mujahideen as well…what a coincidence.
        ( Wikipedia)

        • If I was an Iranian terrorist general, and was tasked with creating mischief and destruction of the US and it’s allies,…..I would be hellbent fearful of ever leaving Iranian soil for the rest of my life. These American-built drones, which are piloted by US Air Force pilots in a Las Vegas bunker, are deadly accurate. CIA tracking Intel, through a global-support system, and pinpoint laser steering systems for the Hellfire missle, allow zero escape for these bastards. And little collateral damage. Certain death. And the Iranians and their terrorist networks know it. Fantastic American ingenuity.
          Rods from God! BTW, who get the ring? Trump should display it in the White House.

        • Uh, Mr. Stine…..1979 was also the year that Democrat President Jiminy Carter had been in office for three years. We had 18% interest rates for bank passbook accounts, 17% unemployment, gold was running at insane prices (as was oil), 52 Americans were held hostage on their own soil (US embassy in Tehran), and Carter was supplying arms to Saddam Hussein in Iraq. And Billy Beer was a bust, as we’re his efforts to push influence in a few little dictator countries in Africa. The ONLY smart thing Carter did was to listen to little Amy, who told him not to build anymore nukes. Remember all that, Mr. Stine? That’s why your guy, Jiminy, had one term, and then…….Crickets.

    • Where are there you go again always wrong….. killing a big player terrorist only makes the world a safer place and the Iranians aren’t going to do crap because they know who’s got the bigger bombs.

  • So glad you see the Truth, finally, Mr. Stine. And thanks for supporting our President.

  • Oil futures weren’t yawning last night. That was a whiplash.

    .

    And I was so looking forward to getting 50+ “refugees” imported from. Iran by the Governor too…

  • Let’s see if we can get the ball rolling on this one. The State of Alaska is big enough to take care of the needs of the country.

  • When the Saudi oil processing facilities were attacked by the lackeys sent by the Iranians likely at the direction of known terrorist and now dead Soleimani, oil only saw a slight bump and that was about 5% of global production. There are so many oil reserves even a two week hit to 5% of global production is barely a blip. The loonies on the left would have loved to see WWIII come about under President Trump, and while this would have driven the price of oil up, not even the Iranians want WWIII…it’s strange that the Looney left was rooting for it.
    .
    The biggest take away from all of this is what a shoddy deal the Obama Administration did in dealing with not just Iran, but in all foreign affairs. The Iran nuclear agreement was a give away that did not further American interests, and has now been shown to harm American interests.

  • The higher energy prices will increase inflation and increase the cost of goods and services, which will stagnant the economy.

    • Wrong. That was the 1970s.

  • So interesting to see so many Alaskans chatting about Middle East war and its effect on the price of oil. Although they can’t openly say it, many secretly yearn for just such an event so as to drive up the price of oil in order to rescue the State’s budget, maintain their way of life, live tax-free, and preserve the sacred PFD. Pretty twisted.

    It’s time for Alaskans to face facts. Alaska and the North Slope oil were pretty much one-trick pony. The gravy train is over, there will never be another oil boom, and the State will slowly revert back to what it used to be before oil arrived. Young people are leaving, the population is shrinking, the State can no longer afford the largesse of the past, and there are no more giant oilfields on your horizon.

    Oh, and don’t forget the inconvenient truth that the increased oil production you so desperately desire will drive up global temperatures, and flood your coastal villages.

    What a sorry state of affairs.

    • Time for your bath, Whidbey. Scrub hard!

  • You’re kind of deranged dog. There’s plenty of untapped oil in Alaska and off our coast. Yes global warming is happening but it’s a natural phenomena it’s happened before and it will happen again just like the next ice age is just around the corner. You Chicken Little people crack me up. yes we lost three thousand people last year from the population. Some moved down to the lower 49 for whatever reason. We will just split up their PFD and give it out to everyone. I would wager that most of them we’re just here for the boom days anyway. We aren’t relaying on middle Eastern oil. We have enough of our own. All we did was kill a terrorist and you chicken littles start hiding under a bridge.

  • I want my ring back!

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