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On March 9th and 10th, American media immediately discovered what was behind the current oil price war: Russia is “waging an oil war with America.”
This was reported by both the National Interest and CNN, both outlets alleging in a very veiled, unclear and, in a manner very obviously constructed out of thin air, that Moscow (and “evil overlord” Vladimir Putin) are somehow specifically “attacking” the US economy.
Nikolas K. Gvosdev, whose piece was published in National Interest is the Captain Jerome E. Levy professor of economic geography and national security at the U.S. Naval War College, and a senior fellow at the Foreign Policy Research Institute.
According to him, it is very apparent that this is a “big gamble” for Moscow, but it bets that by the end of 2020 “it will be able to not only push back against the United States but also to reconstruct its partnership with Saudi Arabia.”
The entire Russian strategy is based on US politicians’ apparent complete inability to hide any of their future plans and, as such, reveal whatever they’re about to do months, or even years in advance.
And an example was given with Nord Stream 2 and TurkStream:
“Moscow attempted to accelerate the completion of these projects before a slow-moving U.S. legislative process could finalize another round of punitive sanctions. Turkish Stream was completed just in time and is already sending Russian energy to Turkey and Southern Europe. Meanwhile, Nordstream-2 would have made it if it hadn’t been for those pesky Danes and their environmental protection processes, which held up work on Nordstream just long enough for an eleventh-hour U.S. sanctions push.”
Too bad Nord Stream 2 will begin work soon, and, as it has become more than apparent, US sanctions are unlikely to deter it.
Gvosdev is attempting to justify the US’ questionable success in diplomacy in recent months and years, with a focused attempt and attack by Moscow.
This is furthermore presented, according to the professor, in Russian opposition of Turkey in Syria, which is, also, an apparent attempt to counter US influence.
“We have seen over the past several months a new hardening in the Kremlin’s policies—where Russia is willing to risk escalation in order to gain advantage or discredit the United States. The world has watched this pattern unfold in Syria vis-a-vis Turkey over the past several weeks. The Russians pushed through some of Ankara’s red lines and then let Turkey see to what extent it could or could not rely on the United States and its European allies—and then President Recep Erdogan traveled to Moscow to re-open negotiations with Vladimir Putin.”
At the same time, the opinion piece entirely missed any reports that US were arming groups that were directly attacking Turkish forces in northeastern Syria, for example.
And, of course, the current oil price war – which according to US media, Russia began, is specifically aimed at US, and it doesn’t matter that it is a very scorched earth approach, Moscow doesn’t care – it’s willing to do anything it takes to cripple the Americans, even cripple itself much more.
In this very “cut your nose to spite your face” approach, Moscow has the following agenda:
“Russia seems willing to engage in a major stress test of the U.S. energy export approach to a prolonged price war. Given that the Trump administration is unlikely to purchase large amounts of U.S. production at a guaranteed high price for the strategic reserve, U.S. producers will face the prospect of much lower revenue—and reach a point where it no longer makes business sense to stay in operation. While some projects are likely to be absorbed by the energy majors, whose economies of scale can make some projects cost-effective, overall U.S. production may decline.”
This also goes further, it depends on the chance that Joe Biden could become President, and assume office in January 2021, reintroduce Barack Obama’s restrictions on oil production, and then, if Russia isn’t entirely bankrupt – it could announce its victory over Washington.
CNN looks at the situation in a rather more “analytical” manner, presenting numbers of how much the US is losing.
Mind the quotations, since the “analytical” part only presents US companies and numbers, and acts as if those of Russian companies and the dropping value of the ruble, specifically against the USD doesn’t even exist.
“Putin’s goal is to wrest market share back from American frackers, whose debt-fueled growth caused Russia to lose its title in 2018 as the world’s largest oil producer.”
“This is a response to try to cripple the US shale industry,” said Matt Smith, director of commodity research at energy research firm ClipperData.
“Russia’s strategy seems to be targeting not simply US shale companies — but the coercive sanctions policy that American energy abundance has enabled,” RBC Capital’s Helima Croft said.
These reports are all and well, and are constructing a very “convincing” illusion that Russia is behind this entire plan, that in the long term would cripple the US, if Moscow’s economy could even survive such a gauntlet (which neither of the reports take into account).
Both reports entirely disregard that the aggressive actions, in the form of flooding the market with oil, providing astounding discounts and more were initiated by Saudi Arabia.
Riyadh’s actions damaged Russia’s interests directly, with massive losses in just a matter of days. If Russia’s plan was to, instead, cripple the US, that plan is failing, terribly.
Furthermore, Saudi Arabia’s energy ministry has directed oil producer Saudi Aramco <2222.SE> to raise its output capacity to 13 million from 12 million barrels per day (bpd), CEO Amin Nasser said in a statement.
“The company is exerting its maximum efforts to implement this directive as soon as possible,” Nasser added.
Moscow said Russian oil companies might boost output by up to 300,000 bpd and could increase it by as much as 500,000 bpd, sending the Russian ruble and stocks plunging.
Where specifically Washington fits in the entire picture in Saudi Arabia initiating and continuing to wage a full-scale oil price war, aimed at Russia, remains a mystery for all but American media.
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What is Interesting, is how long it has taken for them to get their spin merchants to respond to Russia saying no. Did they seriously have no idea that Russia would happily take all the abuse thrown it’s way?
I remember the 2014 sanctions and how the US and EU got cockier, when Russia refused to throw their toys out the pram and have a hissy fit. Then out of the blue, Russia retaliated, after much consideration and finding the perfect response. Russian agricultural market was off limits to those that sanctioned her. How the trolls and media laughed, but, how much did that cost the EU and US? What happened to the Polish apples and who took over as the top grain exporter, GM free, of course.
Same with Ukraine not paying their energy bills to Russia. When least expected, Russia demanded payment in advance.
Same as Crimea. 3 weeks and no loss of blood, before she was home with Russia.
That is why I laugh at all the trolls, who blame everything happening in Syria, on President Putin. They have no understanding of patience, perfect timing and ‘The Art of War’. Whilst being fully upto speed with ‘instant gratification’.
You speak truths. Dumbass monkeys instantly fling shit and think they are the shit for doing so and the other monkey looks weak for not responding in kind. Whereas chess masters take their time to plan out their moves, several steps ahead.
Perfect timing is an art in itself, AM. An art that the bloated US has ignored for many decades.
Just love Russian timing, whilst being a ‘crash, bang, whallup’ type of person, with zero patience.
Patience comes with practice apparently.
Haha, that is why I never found it.
Russia had no real choice as I see it. If they had slowed oil production along with OPEC then US shale would have stepped up to fill their share and dominate more markets. So basically Russia had no choice but to go all in to push back, regardless of how much money the US prints. No, US shale won’t collapse or go bankrupt, but the less profitable wells will be turned off as otherwise the US will have to continue to print bailout after bailout, which would add significantly to the already unsustainable inflation and impact the economy.
The US will have to begrudgingly learn to negotiate and share the oil market with everyone else, otherwise this could go on for years and inflation would get out of control.
The wildcard though is Syria. They have already made a number of threats about getting involved if the agreement doesn’t hold….which we know it won’t. And I see they have recently set up air defense in central Iraq which would be very convenient to keep Russian supplies out. So if war breaks out the price will quickly recover and that Shale oil be very convenient.
of course Slavs think, feel differently than anglos…anglos do not think dialectically; they particularize and decontextualize—slavs obviously do….economists have observed the distinct anglo model vs the Rhine model…it is questionable whether anglos feel—a domain where these insecure cowards frequently bully each other…”amerikans do not remember, they do not feel—they live in a materialist dream” (Ostrogorski)…the money worshipping, sexually repressed amerikan is so weak and psychologically damaged that they believe their crumbling empire can be reformed “for an amerikan poverty is an embarrassment; for a Serb it is a Socratic symbol of family unity—of struggle”. Kustiricia of course, the monolingual amerikan cannot comprehend this—as Simmel wrote, “the monolingual inevitably confuses style w content”
I suppose this is why Slav nouns are so highly inflected by case …the endings will provide the context so that even if the word is unknown, it’s case generally is and thus role in the sentence like em endings with dative of means… Russian and Czech all the same this way….plus the strong gender expression helps against the LGTD nonsense.
Alot of fanciful words there my friend hate to raid the party here but this should have been a poem instead… a wasteful poem. still great use of words tho that I give you credit for.
The Americans have interests and they chase their interests not like Russia who were risking ww3 against Turkey for freaking Idlib or WW3 over Georgia now that is low IQ stuff. The American chases the cash where the Russian chases shadows or irrelevant causes thats the difference. Smart people fight for something that matters while small people fight for ruins that is irrelevant places like Abu Duhur and the surrounding areas of that region in idlib.
Russian need to chill out and realize the world dosen’t revolve around them despite everything Russia still remains a poor country and largely undeveloped thats the Russians own fault
Racist twat, stick your jackboots up your arse and fuck off while you’re doing it.
A war is a war, but MBS gave a gift to the global economy. It’s time for those who only know how to pump a black liquid from earth and scream allahu akbar, will give something back to the rest of the world.
Russia needs to nationalize the central bank and Gazprom, Russia can’t have ISIS/al-Qaeda/Ukronazi-sponsoring Ziocorporate terrorists as “partners”, corporatization will predate on Russian people; and Turks and the Ziojew mustn’t violate sovereigh Syrian land and airspace. The US economy is a huge rigged casino bubble kept afloat by the Fed bankster cartel and its Ziocorporate subsidiaries from the Pentagon to big oil/fracking, big tech and big pharma, and Russia shouldn’t be facilitating their attempts to impose their world “order”.
What a load of shit. Uh’murikkkanz are in complete denial…
U.S. is a bully and the only way to deal will bullys is to not bend over to them and give them a bloody nose here and there.
Russia is in the best position. Cheap production, complex network of pipelines both to the EU and China. Saudis produce at a much higher price aside from that they are on the brink of a civil war. U.S. shale gas and oil are not competitive at 3-4times the price and they can only deliver via LNG tankers, but they lack the harbours and networks. There are only 1-2 places where they can offload but even than not many are willing to pay the price, mostly poletards and baltic nazis and its mainly for local consumption since they still need extensive work to expand their delivery system. Shale oil without bail-outs will be toast within a year.
Nordstream a-go-go.
P.S. CIA trolls and hasbarats will cry and rage ;)
This price war is a marathon, not a sprint. The outcome of Russia’s decision to let the market decide on supply and price instead of fiat quota’s that give Shale a free ride will not be known for months, or even into next year. The timing is awesome though, as Russia built up the cash reserves to fill in the budgetary gaps and struck at the same time that debt related to shale is being called in and re-structured here in the United States. Add to that the election season with Texas and Pennsylvania both in play and Russia created a perfect blow back pressure point to American sanctions and interference with Russia’s business around the globe. Reports here in America say that $175 billion of shale debt will come due this year, if prices remain below $40 a barrel. That’s going to hurt. The timing of all of this was planned far in advance. Clearly Russian planners poured over the financial documents of shale production and coordinated the end date of the outgoing OPEC+ agreement with the debt calls and the U.S. election cycle. The blow and the pain induced was therefore maximized.
I think you put that rather well. Schadenfreude Blues for the Great Satan. ;O)