John Hofmeister, a Fuel Freedom board advisor and the former president of Shell Oil Co., appeared on NBC’s “Meet the Press” on Nov. 23 to discuss the falling price of oil.
Watch a clip here:
Hofmeister, appearing along with author Daniel Yergin, was asked by host Chuck Todd whether lower-priced oil amounted to an extra sanction against Russia and Iran, which already are burdened by sanctions — Russia for its actions in Ukraine and Iran for its pursuit of a nuclear program.
It is. It’s an extra sanction because it reduces their economic clout. Well, we’ve seen what happened to the Russian ruble. Iran is not able to subsidize many of its programs.
They need to have oil to be at $100 or more a barrel for them to balance their budget.
Yeah, the estimates are Russia needs well over $100, Iran even more. And the consequence of that is the people of Russia, the people of Iran will suffer as a consequence of the low oil price. That’s why the panicked feeling within the OPEC meeting coming up on Thursday.
As we know, at that meeting, OPEC decided not to cut production quotas, effectively ensuring that oil prices would not stabilize in the near future.
As The Wall Street Journal reports, Saudi Arabia, OPEC’s largest producer, now believes that oil will settle at about $60, down from about $110 over the summer.
Hofmeister said that, despite the worldwide surplus of oil, the U.S. should keep pumping, in anticipation of demand coming back:
… the reality is, we will be short of oil in the world over the next several years as global growth exceeds oil production. So we need all the production we can have. We need all the infrastructure we can build to make sure the U.S. is taken care of.
Hofmeister, author of the book Why We Hate the Oil Companies, has much more to say about oil in the Fuel Freedom-produced documentary PUMP. The film is now available for pre-order on iTunes. Visit PumpTheMovie.com to watch a trailer and learn more.