🇫🇷 🇬🇧 Could an Israeli strike on Iran’s nuclear installations have essentially nothing to do with geopolitics in the Middle East, but everything to do with the price of fracked oil in the remote U.S. state of North Dakota and the immediate political needs of Donald Trump? There is a clear path of documentation that leads to raising these questions. We should look at Trump’s electoral campaign based on the slogan “Drill-Baby-Drill;” why the cowboy oil frackers who backed Trump may well feel betrayed; why oil has at best an uncertain future but an absolutely certain oversupply; why the blindingly obvious chokepoint for oil should be in the center of the discussion; and why Trump’s notably declining credibility in the US may play a major role. Most analysis of a possible Israeli strike on Iran’s nuclear installations focuses on geopolitics in the Middle East. For example, In Le Monde, May 23, 2025 : “Benyamin Nétanyahou a paru bien isolé durant la tournée de Donald Trump, du 13 au 16 mai, dans le Golfe. Lors du retour du républicain à la Maison Blanche, le premier ministre israélien s’imaginait en tête de proue d’une reconfiguration régionale – un nouveau Moyen-Orient débarrassé de la menace de l’Iran et de ses affidés – par la force, dans le prolongement de la guerre qu’il mène dans la bande de Gaza depuis octobre 2023. Il n’a pu qu’acter le fossé grandissant avec le président américain, qui se voit en « faiseur de paix » et en « unificateur » au Moyen-Orient, et fait désormais d’un accord avec l’Iran la clé de voûte de sa vision pour une paix régionale.”[i] Drill-Baby-Drill and the Texas Frackers Whatever Trump may or may not want for the Middle East, he ran for election on the slogan “Drill-Baby-Drill,” with the goal of US “energy dominance.” This certainly implies massively increasing the production of US oil, i.e., more fracking. The best places are the Permian basin largely in Texas, and the Bakken formation significantly in North Dakota.[ii] Fracking, during the administration of renewable energy advocate Joe Biden, had, ironically, made the US the world’s biggest oil producer. According to data published by the NASDAQ, in 2024, the US produced 21.91 million barrels per day, almost double that of Saudi Arabia, with 11.13 million barrels per day. [iii] As has been widely reported, drilling has gone down, not up under Trump’s proclaimed policy of Drill-Baby-Drill. Why? In part because drilling costs have gone up; Trump’s on again/off again tariffs have raised the costs of the imported steel and aluminum used in drilling. No US oil producer is happy about this. The CEO of Chevron, Mike Wirth, chose the biggest possible US oil industry audience to denounce Trump’s tariff caprice; addressing a massive annual oil industry conference in Houston, Wirth castigated Trump: “Swinging from one extreme to another is not the right policy…We really need consistent and durable policy.” [iv] Drill-Baby-Drill and the Strategy of The-Last-Man-Standing US drilling has gone down also because others can play “Drill Baby Drill.” On April 3, the coalition of oil producers led by Saudi Arabia and Russia, stunned the market by announcing a production increase for May three times bigger than had been anticipated. Bloomberg.com quoted Helima Croft, head of commodity strategy at RBC Capital and also a former CIA analyst, who said the production increase was “to send a warning signal to Kazakhstan, Iraq, and even Russia about the cost of continued overproduction.” [v] But there is much more to the Saudi strategy. After two more announcements of production increases, Bloomberg reported on June 1, “People familiar with the matter said Riyadh is motivated by the desire to claw back the market share it has relinquished over the years to US shale drillers.” [vi] The world is shifting out of fossil fuels and into renewable energy–more slowly than it should, but inexorably. Half of the new cars sold in China are now electric. [vii] The International Energy Agency last year forecasted, for electricity, the renewable energy share will “expand from 30% in 2023 to 46% in 2030. Solar and wind make up almost all this growth.” [viii] So every oil major appears to have the ambition to be The Last Man Standing. At the moment, this has to be one in the Middle East. According to an October 2024 report by energy consultancy Rystad Energy, “onshore Middle East is the cheapest source of new production, with an average breakeven price of just $27 per barrel.” [ix] But Rystad, in its readily available information, doesn’t breakdown this figure by Middle East country or company. However, Saudi Aramco issued a bond prospectus on the London Stock Exchange five years before. [x] It showed a breakeven range around $10 a barrel. Whatever is the true breakeven figure for Saudi Arabia, it is almost certainly less than the breakeven for U.S. shale oil producers, based on data from a March 2025 survey of actual shale oil producers by the Dallas branch of the U.S. Federal Reserve. It showed that the best (or luckiest) shale oil producers need $40 a barrel to cover the costs of a new well. [xi] At the time of writing, WTI, the U.S. benchmark, has been hovering in the low $60 range. So many shale producers are losing money at this moment. Even at the Rystad Energy figure, Saudi Aramco either will be the last man standing or in a very short list of those who are….unless something big happens. A major slice of Trump backers, the U.S. frackers, are obviously not happy with the lower oil price from too much Middle East oil combined with drilling costs that are too high. As quoted in the Washington Post on May 10: “It is truly affecting everybody,” said T. Grant Johnson, president of Lone Star Production Company, an oil exploration firm in Texas, and the chair of the Texas Independent Producers and Royalty Owners Association. “There was a lot of talk of, ‘drill baby, drill.’ But these companies are not going to drill if the economics

Par Bell R.

18 juin 2025