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Guest Post: The Might Of The Petro-Dollars At Work Once Again

Tyler Durden's picture




 

Submitted by Claude Salhani via OilPrice.com,

Petro-dollars, the word used to describe the billions of dollars earned from the sale of oil and natural gas, have helped change the shape and future of many counties in the Middle East, usually for the better, but not always.

In a few short years Petro-dollars have helped shape the Gulf states into the modern and futuristic looking cities of the future that one finds in today’s architecture in Dubai, Doha and Riyadh.

But now those petro-dollars are being used to shape the political future of the region and to model specific policies in a number of countries, such as Syria, for example, where petro-dollars are hard at work today.

Saudi Arabia, for example is investing billions of its petro–dollars in an attempt at shaping the Syrian political landscape more in its favor and away from the Muslim Brotherhood, an organization that the Saudi and other Gulf states regard with contempt and fear. 

But after its brief string of successes in Egypt, Tunisia, Palestine, Syria, and to a lesser degree, Turkey, the MB now appears to be on the retreat.

Among the first signs that not all is well in the house of fundamental Islam comes amidst reports that Khaled Mashaal, the leader of Hamas is seeking to relocate from his current base in Doha, the capital of the oil and gas rich Gulf state of Qatar.

Although Hamas is denying this rumor, the Palestinian Islamist movement had also denied in the past similar reports that it was relocating to Qatar from Damascus in 2012, as indeed it had.
Should this report prove to be true it would sustain the fact that the Brotherhood is indeed on the retreat.

In the past 12 months alone the Brotherhood has suffered a number of serious setbacks. The group went from winning an election to holding power in Egypt, to being once again banned and driven underground.

In Tunis, similarly, the MB government that was voted into power after the fall of Zein el Adedine bin Ali, is now on the way out, as popular protests, much like in Egypt have forced the changes to take place.

And the inroads the MB was making in Syria seems to have receded after the intervention of Saudi Arabia. The petro-dollars are at work once again supporting the anti-Assad regime, but not those who tend to be too conservative and that the Saudis and the Emiratis know only too well will one day turn against them.

Riyadh, for one, is not about to forget the lesson of the returning “Afghan Arabs” that nearly toppled the royal house of Saud.

Riyadh also had to apply pressure on its smaller neighbor, Qatar, and “convince” the ruler Emir Hamed Bin-Khalifa, a strong supporter of the Muslim Brotherhood to step down in favor of his son, Tamim. The precise circumstances and reasons for the Qatari’s ruler sudden departure from power remain a mystery to this day.

With the son now in charge in Doha, Qatar’s financial support of the Brotherhood is virtually drying up.

In retrospect perhaps the rapid advance of the Muslim Brotherhood was a tad too fast in a part of the world that is unaccustomed to change. This rapid gallop frightened the ultra-conservatives regimes in Riyadh and Abu Dhabi, who then took steps to rectify what they did not like.

In the months that followed, the Brotherhood was forcibly removed from power in Egypt with help of Saudi and UAE petro-dollars.

And thanks to petro-dollars also supplied by Saudi Arabia and the UAE, the Muslim Brotherhood no longer seems to be about ready to remove Syrian President Bashar Assad from power. Not that the Saudis of the Emiratis have any great affection for Assad, quite to the contrary, they would like to see him go. And their petro-dollars are making sure of that.

 

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Mon, 10/21/2013 - 14:38 | 4076774 Charles Nelson ...
Charles Nelson Reilly's picture

what a crock of shit, Claude.

when exactly was the MB going to take out the Assad regime?  Oh yeah, right after the false flag event that blew up in the USA's face.

Mon, 10/21/2013 - 14:48 | 4076813 negative rates
negative rates's picture

We got bio-petro dollars right here at home, is there anybody listening?

Mon, 10/21/2013 - 15:20 | 4076898 Urban Redneck
Urban Redneck's picture

No. The US has an almost impossible bar just to reach self-sufficiency. The amount of energy production required to generate six-figures of "excess" GDP for every useless eater in the USSA isn't even on the drawing board of the most optimistic of nutcases.

Mon, 10/21/2013 - 15:07 | 4076871 Jack Burton
Jack Burton's picture

Bingo Charles!  The USA has a long association with the MB and we do with the Saudi Arabian rulers. In Egpyt the USA had to do an about face several times as it's support for the MB got it in trouble.

Syria is a Sunni Shia war. Saudi Arabia and the USA have taken up the cause of the Sunni. This deal was done during the war in Iraq when the Pro Saddam Sunni carried on the fight for years against US occupation. Then the USA hit upon the idea of a US/Sunni alliance. The US fostered a civil war by using terror bombings to set Shia and Sunni against each other in Iraq. The US then went to the Sunni and said "Stop fighting the occupation US Army and we will give you money, arms and support to fight the Iraqi Shia". Presto! The was in Iraq ended in a matter of weeks and turned into a full blown Sunni Shia Iraqi civil war. WHich is low grade even today. Now the US sees the Sunni as the key to breaking Syria and Iran both, and providing a willing terror army to be used in the future against Christian Russia. Note a terror bombing there just today.

The alliance is thus: The USA and NATO + Saudi Arabia and Qatar + The broad Middle Eastern Sunni community + Israel + the CIA and Mossad  versus  Syria, Iran, Russia and the broad Shite community of the Middle East.

This is the line up for the low grade regional war well underway in the Middle East and on the SOuthern Fringes of Russia. It would be a clear win for the US and NATO but for Russia seeing that the real end target of the US / Sunni alliance is them. Al-Qaeda is now a US agent to a large degree, but a faction of Al-Qaeda still needs to be flipped. These are the Afghan and Pakistan Al-Qaeda. They are still anti USA, the rest of the broad Middle Eastern Al-Qaeda terrorist movement has been turned by the CIA and Mossad, and are fully allied with the USA.

Look for this to grow into a full scale regional war. There is now only one wild card left. That is the role of China. They like to let the barbarians fight amoung themselves as to weaken eachother and allow China to prosper. Thus China will be content to watch this play out. They can only win as the cnflict spreads. Only If Iran looks to fall to NATO might they step in. As they have no interests in seeing the USA and NATO win this regional war. A NATO in control of Syria and Iran both is not in Chinese interests.

The USA can only play this war game as long as the money can be printed and the petro dollar remains king. The weak link in the US position is financial. We are money printers now, and nothing more. China can have a big say in how long the US can keep printing.

Mon, 10/21/2013 - 16:51 | 4077213 Oracle 911
Oracle 911's picture

So then the question is:

 

When will China stepping in (I mean the time, not the causing event) and say "stop this QE madness"? Or they did it by the "we need de-americanize the world"?

Mon, 10/21/2013 - 17:54 | 4077397 falak pema
falak pema's picture

China has just landed 20% of the new LIBRA oil field of projected 2MMB/D production that can increase to 4 MMB/D after 2020 in Brazil. Brazil will be producing 5 MMB/D in 2020, in the big league.

China is placing its LT pawns on the table whereas USA wallows in ST budget and debt problems.

Two different trajectories.

Incidentally the NSA deal has killed the Internet golden egg domination of US. Every country will now want its own google and secure Internet. In 20 years time this Internet monopoly advantage will have gone just as it has for Boeing today.

Mon, 10/21/2013 - 17:57 | 4077413 QuietCorday
QuietCorday's picture

Jack, this is a game of ten-dimensional chess, and I suspect what we are seeing is a massive geopolitical sting.

Everyone who needs to know knows the rebels in Syria are Saudi-backed orcs. Organ-eating videos were such a clever move in the circumstances. You need to remember the real dynamism of the Muslim world is far, far more to the East -- and Obama knows Indonesia very well indeed. One could almost suppose that is why the guy was picked ...

What the Saudis cannot see is that they are being slowly manoeuvred into the position of becoming perceived as heretics (funding people that eat human organs will do that for your "Islamic" reputation) which is, obviously, very awkward when it comes to their control of certain key religious sites. And being perceived as heretics removes the one potential bar to their takedown: the potential *statement* power of their stewardship over Mecca and Medina.

But if they aint "Muslims" anymore in the eyes of every decent Muslim in the world, then that is no longer a problem, is it? In fact, you could argue it would be a *necessity* to get them out.

And getting them out sure solves a lot of problems for a lot of people: the US, China, Russia, Europe and all those dynamic Far Eastern Muslim states that don't much like all the petrodollar-sponsored bollox that comes out of Saudi mouths. In fact, everyone benefits if the House of Saud falls ...

And there is the path to the "eighth country". Shame they had to destroy Syria to do it. 

Mon, 10/21/2013 - 14:39 | 4076785 slaughterer
slaughterer's picture

Whats up with WTI today, I thought it was going to $120?  

Mon, 10/21/2013 - 14:49 | 4076815 kralizec
kralizec's picture

Excess inventory...or so the puppet theater says...

Mon, 10/21/2013 - 14:54 | 4076837 negative rates
negative rates's picture

No, turns out that fracking gave us an abundance of CH4 butane. Not normally used as a part of gasoline because of it's inefficiency with mileage and other assorted problems, but they put it in there and hence, reduced price because we don't have to refine as many bbls to bring the same amt of gasoline to the mkt place. But that's okay cause you just lost 3-4 miles/gal with new and improved stuff, so carry on hucklebeery, is end is near. 

Mon, 10/21/2013 - 15:09 | 4076874 Almost Solvent
Almost Solvent's picture

Edmunds.com: How do you like running on E85?

Avalanche Owner: The mileage sucks. On gas I can get 18 (miles per gallon). On E85 I get like 12.

Did you buy this truck so you could run on E85?

Yup.

But you get worse gas mileage. So why do you do it?

To help the environment.

Footnote: This man didn't seem to fit the profile of an environmentalist, tree-hugger or greenie. He was just a regular guy trying to do something good for the planet. We experienced a small burst of patriotic pride.

 

http://www.edmunds.com/fuel-economy/e85-vs-gasoline-comparison-test.html

Mon, 10/21/2013 - 15:15 | 4076885 negative rates
negative rates's picture

It only gets worse mileage if you have 1/2 a lead foot, you see, ethenol has an oxygen molecule which makes for a more efficient and powerful combustion cycle. Now if other things like lead feet or contaminated fuel are contributing to the mileage, then so be it,  just make your own fuel and then you know it's clean and pure from the heavens.  

Mon, 10/21/2013 - 15:29 | 4076931 RafterManFMJ
RafterManFMJ's picture

^BS!

Mon, 10/21/2013 - 16:17 | 4077100 negative rates
negative rates's picture

Check for yourself Eistien.

Mon, 10/21/2013 - 17:01 | 4077256 StarfishPrime
StarfishPrime's picture

I'd recommend actually checking the facts before spewing BS...

E85 - 81.8k BTU/gal

Gasoline - 114k BTU/gal

It's physically impossible for E85 to give you the same mileage per gallon as gasoline - there's just not as much energy!

For additional fuels:

Diesel - 129.5k BTU/gal

E100 (100% ethanol) - 76.1k BTU/gal

LNG - 75k BTU/gal

Kerosene jet fuel - 128.1k BTU/gal

Mon, 10/21/2013 - 16:28 | 4077142 Stoploss
Stoploss's picture

Add a gallon of Nitro Methane. No more issues..

Ethanol is for drinking.

Mon, 10/21/2013 - 17:24 | 4077309 orez65
orez65's picture

Even Al Gore, the mere thought of this ass hole makes my skin feel like an iguana is crawling on me, has confessed that making ethanol creates more CO2 than burning gasoline.

Patriotic duty?, no you are just a fucking ass hole shit head sheeple!

Get a fucking brain transplant you fucking amoeba brained shit head.

Mon, 10/21/2013 - 14:39 | 4076788 NoDebt
NoDebt's picture

Um....... pffffffff....... pass.

Mon, 10/21/2013 - 14:42 | 4076794 Shizzmoney
Shizzmoney's picture

Petro Dollar > Federal Reserve Note > Sovereign currency (i.e. US Dollar) > PMs.

In an actual free market, that should be the OTHER way around (with the Federal Reserve Note being deleted for the obv reasons).

Mon, 10/21/2013 - 14:54 | 4076835 Super Broccoli
Super Broccoli's picture

a world where paper values petrol ? jeez that must be what they call renewable energy

Mon, 10/21/2013 - 14:43 | 4076800 jaxville
jaxville's picture

   Muslim brotherhood removed from power in Egypt to be replaced by a general Al Sisi (not sure if that is correct spelling) whose mother is a Jew (sure about that). Kind of makes you wonder when Egypt is going to have someone run the country who is really with the people.

 

  The problem with this story is that the Muslim Brotherhood were among the most ardent opponents to Assad. Saudis are no longer funding them!?!? I call bullshit!

 

   I can hardly wait for the day when the entire house of Saud is swinging at the end of a rope and someone with a turban and a Koran in hand is running that country. What a breath of fresh air that will be.

Mon, 10/21/2013 - 14:54 | 4076836 Mark Urbo
Mark Urbo's picture

"turban and a Koran in hand is running that country"

 

 

Which then equals Radical Islam + Petro Dollars.  Sorry, but that is pure ignorance at a dangerous level...

Mon, 10/21/2013 - 15:35 | 4076928 falak pema
falak pema's picture

Al SISI the secular military leader, new Mameluke, now tells the bearded ones : I'll shave you so clean your sister won't recognise you! 

"Don't do that. I like to have the love with my family. They are the only ones ready to spoil me by soiling themselves." Says the flinching Brother.

"God's will be done my son." Says his Imam. "Don't bend to the military one."

"God's got nothing to do with it, its you the bearded fools who need to walk on hot coals." Retorts the new Mameluke.

Al Sisi, having seen Fahrenheit 450 movie wants to stop the rot of theocratic burning of whats left of Egypt's treasures.

"I'm not sure Al Sisi you are doing the right thing", says the voice of his master over the phone. "I am going to pull the plug on your military aid disbursements if you continue to drill holes up the asses of the brotherhood. My friends in Riyadh are not amused. You know what that means for me?"

'I know and I will up the ante Bossman, who looks more and more like Strawman. In fact the Saud princes are so scared they tell me they will pay me my shortfall from your side provided I cool down the Brotherhood lapidation. So what can you offer me that I can't get from them directly?'

'You want to feel the steel of Israeli bayonets up your ass, you military stool pigeon?' Says the irate voice of his master.

'I don't think that's a good idea. If you send the Jewish one I will have the Libyan brigade at my disposal as well as the Shia brigade. In fact by one fell stroke the whole of Islam will be at my beck and call. And I'm not even Islamic. In fact I'm son of Nasser. That's my hidden dream. Imagine if the Shias and Sunnis died for secular Islam to fight Sionist Israel to save the Canal from falling into their hands again! What a resurrection of Nasser's dream! And all thanks to you for having played your cards so badly. From Afghan to Syria you are stymied, Bossman!" 

"Oh God, Where are you Kissinger when we need you ?!"

Mon, 10/21/2013 - 15:31 | 4076937 Urban Redneck
Urban Redneck's picture

Al-Sisi could be wearing a pink tutu and bouncing Barry on his lap - it wouldn't change anything. He is OF the military and has the BACKING of the military, neither the sheeple nor the joos figure into the equation.

Much more of the world is run by Military juntas than the muppet media lets on to. Burma STILL is, despite the name change, capital change, and some democratic decorations. Right next door, Thailand is the same except for the fact they did their major re-decorating decades ago, and just require some touch up paint every once in while...

Mon, 10/21/2013 - 15:43 | 4076970 jtg
jtg's picture

Going from bad to worse is better?

Mon, 10/21/2013 - 14:48 | 4076811 Dr. Engali
Dr. Engali's picture

Wtf is this propaganda? This sounds like it was pulled right off of the White House web site.

Mon, 10/21/2013 - 14:50 | 4076819 kralizec
kralizec's picture

Jeez Doc...at least let us warm up to that conclusion!

;)

Mon, 10/21/2013 - 14:53 | 4076831 Dr. Engali
Dr. Engali's picture

This garbage is so bad that I can't even rate it. Tyler needs a negative rating system.

Mon, 10/21/2013 - 15:00 | 4076854 kralizec
kralizec's picture

Not the first time that thought has entered my head...

Must be a pretty slow day to find filler this compost-ready!

Mon, 10/21/2013 - 15:11 | 4076879 Almost Solvent
Almost Solvent's picture

BUT!

He has his own website!

http://www.claudesalhani.com/

 

 

Mon, 10/21/2013 - 15:21 | 4076903 AlaricBalth
AlaricBalth's picture

I'm still brain locked on what might constitute "futuristic looking cities of the future".

Mon, 10/21/2013 - 15:24 | 4076914 kralizec
Mon, 10/21/2013 - 19:31 | 4076849 Mark Urbo
Mark Urbo's picture

..it was a Valerie Jarrett memo...

Mon, 10/21/2013 - 14:49 | 4076818 AvoidingTaxation
AvoidingTaxation's picture

worst ZeroHedge article in a while.

Cheers bitchez.

Mon, 10/21/2013 - 15:01 | 4076840 falak pema
falak pema's picture

....In a few short years Petro-dollars have helped shape the Gulf states into the modern and futuristic looking cities of the future that one finds in today’s architecture in Dubai, Doha and Riyadh...

Ha, ha, ha, like the opium trade provided money to East India to build Hong Kong and Singapore.

Yes, reality is a bitch. When you are cheating and winning you build your dream and your future bases. But at the expense of the Millions of ignorant minions of ignorance.

That's the Oligarchy trade-off. For a few who become ultra rich as minions of Caesar, or Queen Victoria, thanks to Sassoon...; ' l'agent machiavellique'; the others end up in hell's kitchen.

Rinse and repeat.

Its a recipe that never fails to work called empire building on the carcasses of the desperate and damned.

---No, no, no, you don't get it,  its the price to pay to enter the realm of civilization. Manifest Destiny. Over and out.

Thank you Caesar for clearing the air of "yes we can",  song of victors.

Who can defy those who share the spoils until they spoil the machine that creates the never ending spoils?

C'est la vie! All things come to an end. And then the thieves fall out.

The Makdooms of Dubai even lost the race of races; the Prix de l'Arche de Triomphe this year. Whats happening to the thoroughbreds of the world, doped like Lance to run for Sheikh and Petrodollar glory?

Mon, 10/21/2013 - 15:31 | 4076936 Essential Intel...
Essential Intelligence's picture

Deflation in the USA of the last 100 years would lead to a default on Treasury obligations e.g. T-bills, thus ending the global reserve currency status of the USD. This is because a deflation cuts-short the public liquidity, which is the pool from which the public indebtedness to the private partial reserve system is being serviced. This indebtedness grows to infinity along a column of compound interest, imposed on the issuance of fiat currency. This article surveys the 5 main avenues by which the Anglo-America raids and plunders the wealth out of the common people in many countries,in order to prevent a deflation of the USD, likewise of the GBP: http://osnetdaily.com/2013/10/six-illicit-ways-used-by-the-elite-to-delay-the-dollars-deflation/

Mon, 10/21/2013 - 16:00 | 4077040 DannoH
DannoH's picture

E85 is however a blessing for us gearheads. E85 + turbocharged engine = big fun torque for the street. That and its much cheaper than C16, and no Pb to boot! Plus if you are of the engineering mindset you can extract some really good hooch without paying all the damn taxes!

Mon, 10/21/2013 - 22:48 | 4078222 Youri Carma
Youri Carma's picture

I would have Headlined this piece: The Muslim Brotherhood On The Retreat.

Because also for the Arabs the inevitable question will arise sooner than later: "Am I still willing to deal with dollars?"

Al-Qaeda also received funding from the Saudis and Qatar next to the U.S.. It seems they're also in retreat.

And the Saudies are angry with the U.S. for not invading Syria so somebody somewhere got the bright idea for not unleashing WOIII and pulled some leverage to keep the crazies down.

They over streched themselves in their hubris and somebody took notice.

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