Four energy transactions that Trump will go on on his Middle East trip

President Donald Trump will travel to the Gulf States this week during a visit to negotiate business agreements instead of dealing with geopolitical questions. Here are four ways of how this strategy can affect.

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1. Investments in US energy and production

In the past month, the United Arab Emirates (VAE) committed themselves to investing 1.4 trillion dollars in the United States in the next decade. Some of the investments in the package have already been announced, including a recent commitment from Emirates Global aluminum, to finance the construction of a melt in the United States. If it is built, it would be the country's first new aluminum melt for 35 years and could possibly double the US production. President Trump will probably urge the United Arab Emirates to announce additional plans for investing in the production of US production, infrastructure and energy with petrochemicals, steel and battery production.

President Trump is expected to urge Saudi Arabia to announce where it intends to invest the $ 600 billion, for which Crown Prince Mohammed Bin Salman is obliged to call after the infection in January. Just like in his first term, Trump said that Saudi Arabia would agree with great purchases from US products, he would make the country his first foreign visit. Now he will try to create the special features that will probably also include purchases from military devices and investments in infrastructure, technology and mining.

2. Cooperation of the nuclear energy cooperation

Saudi Arabia has tried to start a domestic nuclear power program since 2006. It has signed several agreements with various contractors and consultants – but with only very low progress as a small research reactor in Riad, which will soon be online. Saudi Arabia has committed itself to Chinese companies to examine domestic uranium reduction and enrichment – a potentially problematic step from the perspective of the International Atomic Energy Agency (IAEO), since it can easily lead to the production of weapons.

However, there are signs that Saudi Arabia is now interested in complying with IAEO standards. Last August, Riad agreed with IAEA -Spotinpections, which should ensure that no weapons are developed, which may be paving a way for working with the United States. Last week, the Trump government announced that the Biden administration demands that Saudi Arabia normalize the relationship with Israel as a condition for nuclear cooperation negations of civilian nuclear cooperation, and put the Saudi atom strength back on the table. On the game, obligations from Saudi Arabia for the use of US companies and American materials for building future reactors and for shops for the delivery of Saudi Arabia of critical minerals to US customers.

3. Pump more oil

Trump was extremely loud about his wish to lower the oil prices. While the US manufacturers do not want to see that the prices are below the range of USD 6 per barrel (Breakeven prices in the most productive slate basins are currently in the low to Mid 60 USD per barrel), consumers would welcome lower petrol prices this summer. The manufacturers of the Middle East seem to help because Opec+ recently committed itself to increasing production by 411,000 barrels per day in June, and it is expected to gradually bring more oil on the market at the market meeting at the end of May. It is unlikely that Trump will press the golf countries to accept additional obligations, but he will assume that they will carry out the press and probably say this.

4. LNG purchases

Trump should urge the golf people to expand their orders for us liquefied natural gas (LNG). Kuwait and Iraq have received its first freight in the last month. Both Kuwait and Bahrain want to buy more LNG in summer to cover the high domestic needs while the natural gas expenses decrease. Trump should urge you to sign long-term offte agreements with US LNG companies instead of relying on the Spot market. This ensures that these countries continue to buy us gas, even if more LNG is available from nearby Qatar, which expands its production.

This should be a simple sale to Kuwait, which is already in discussions with the Australian company Woodside, to buy a 40 percent share at its LNG terminal in Louisiana. Kuwait wants to ensure the LNG supplies from this project, but even with the support of the Trump administration, it will only be fully functional in the early 2030s. Trump should urge Kuwait to sign additional acceptance agreements, with the idea that Kuwait, if it matches LNG in the future, can keep buying loads on the spot market.

Strategically, the announcement of at least two new LNG agreements with countries in the Middle East will help the position of the Trump government if it urges Europe to advance long-term acceptance agreements for us LNG. Europe has rushed into its feet about concerns about emission reporting, although Europe needs US gas to replace the Russian LNG that is currently buying. Trump can use LNG offers with the Middle East consumers to put Europe under pressure, to commit themselves to US purchases before completing the imports of Russian LNG. This would also help to suppress Trump under pressure from Russia, to negotiate Ukraine, as it would continue to push Moscow's income.

It's not just business

President Donald Trump's focus in the Middle East may be on strengthening economic ties, but it is difficult to ignore the background of the increasing geopolitical tensions, especially in relation to Israel, Iran and the Houthis. Economic, commercial and energy markets are important for both the president and for the leaders of the golfers he will meet, but also security and diplomacy. Work together in Trump's head, business and geopolitics and everything is to be done for negotiations. There should be no surprise to enforce energy transactions, trade negotiations, sanctions and even take into account weapon sales in the concert.

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Image: President Donald Trump and members of the US delegation on Saturday, May 20, 2017, take part in a bilateral meeting with King Salman Bin Abdulaziz Al Saud and Saudi -Arabia officials of the Royal Court Palace in Riad, Saudi Arabia. (Official photo of the White House of Shealah Craighead)