Obama's distaste for oil companies is clear, but this ridiculous charge was exposed in a very spirited rebuttal from Exxon Mobil. According to Exxon Mobil their total taxes and duties to the U.S. government topped $9.8 billion, which includes an income tax expense of $1.6 billion. They go on to say that over the past five years, Exxon incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than they earned in the United States during the same period. In other words, Exxon paid more in US taxes than they actually made.
The reason why that's true is that the U.S. takes money to support alternative energy companies like, for example, GE that paid zero, zippo, nothing in taxes last year! Now you would think that the Obama administration would embrace a company that creates jobs and paid that kind of taxes and has helped keep our deficit from being even larger! Yet instead, he embraced the company that paid no taxes. Obama named GE's chief executive, Jeffrey Immelt, as the head of a Council on Jobs and Competitiveness. Exxon did not dodge U.S. tax and point out that their earnings are from operations in more than 100 countries around the world.
Of course a drop in oil prices like we had yesterday makes the President's green energy spending look even more reckless. Oil was on its own with a decisive move lower. Oh sure, you could point to a weak China non-manufacturing number and uncertainty surrounding Europe and the confusion over whether Spain will or will not ask for a bailout. Yet that would not explain why oil fell as hard as it did as other commodities held up better. It would not explain why oil ignored what on the surface seemed to be a bullish oil inventory report.
You could point to Saudi Arabia lowering crude prices to move more oil or even the return of refinery runs as a sign that things were getting back to normal after weeks of refining turmoil. Or you could just chalk it up to one of those seasonal factors.
Yes all of these facts were part of the equation yet for oil to get hit as hard as it did you may have to dig deeper. Even with all of the factors above, it is possible that the market may be reacting to the unfolding events in Iran and reducing the Iranian war premium.
The pressure is on the Iranian regime! Poor President Ahmadinejad. Not only did his camera man defect when he was in New York, now at home he is facing riots as the Iranian currency and economy is starting to collapse.
It seems that the sanctions are starting to put major pressures on the regime. Because that pressure is manifesting itself in the form of riots and unrest, it is possible that the regime will be more focused on restoring order instead of pursuing a nuclear weapon. Israel, seeing this unrest, may give sanctions more time to work.