Categories: Stock Market
Topics: Copper Stocks

The Saudis Want More of Your Petrodollars

Get ready for more pain at the gas pump.

Oil is already up 25% since June, and the Saudis are trying to push it up some more with a surprise continuation of production cutbacks.

Saudi Arabia’s oil minister Prince Adbulaziz bin Salman likes to shock the markets with sudden shifts in policy so he can squeeze short sellers in a process he calls “ouching.” 

Last week he extended the Saudi production cuts to the end of the year, which was much longer than most traders had been expecting. Prince Adbulaziz had intentionally chosen timing that would catch oil markets unaware. His plan worked: prices of crude immediately shot to $90 per barrel. 

But it’s not just short sellers who are affected. It’s also the millions standing at the gas pump trying to get to work. These jarring moves have led to a lot of collateral “ouching” across America.

When it comes to oil, Americans had better be prepared to endure the effects of Saudi-first thinking. Inflation has hit them hard, and they have a lot of yacht maintenance to pay for.

As Bloomberg put it:

“Saudi Arabia will feel few qualms. From their perspective, $90 oil today isn’t the same as it was 10, five or even three years ago. The global spurt in inflation has seriously eroded the buying power of the kingdom’s petrodollars, and ambitious plans to transform the economy need to be paid for.”

The newly-built Jeddah Yacht Club isn’t free — neither is the Grand Prix Formula 1 racing course they built next to it.

They have bills to pay, and they’re not interested in cutting back on their lifestyles just because prices have climbed 40%. Even though high gas prices will cause even further inflation, it’s still a beneficial move for the oil-driven Saudi economy. Their net benefit to expensive crude is much greater than ours.

The new Jeddah Yacht Club, which hosted Saudi Arabia’s inaugural Grand Prix F1 race. Paid for by your petrodollars.

But it gets worse. The Saudis have also coordinated these moves with Russia, who so far have been more than willing to oblige. Russia’s aims for the oil cash are far more sinister. 

Putin needs the money to buy arms from North Korea and to keep the former Wagner mercenaries supplied and at their posts. His coordination with the Saudis and OPEC+ keeps gas high at a time when he needs the cash the most.

It’s moments like this that prove why the switch to EVs away from oil is in America’s best interest. Electricity can be produced from a wide variety of sources that aren’t controlled by a single ill-motivated monopoly.

An EV-led America doesn’t have to put up with the Saudi’s whims. It also reduces Russia’s reach into our energy policy. And most important of all: the switch to electric can be built with American-made materials.

I’m especially optimistic about copper. Advanced new extraction methods are revitalizing American copper — and giving us back the edge in raw materials that’s been missing overseas for decades.

Earlier this year I visited a copper mining company in Arizona that can pull copper straight out of the rock — including from rock that was impossible to mine before. Nowhere else in the world are we seeing such incredible potential.

We can use this American copper to build new electric vehicles, upgrade the ailing power grid (which has been especially needed in Texas this week), and reclaim our outsourced supply chain. Copper’s conductivity can move around massive amounts of energy — and none of that energy needs to come from the Saudis or Russia.

So if you’re “ouching” at the petro pump, as the Saudis want you to be, then it just might be time to buy into American copper. Click here if you’re tired of paying for the Saudi’s new yachts.

John Carl
Editor, Daily Profit Cycle