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As WTI Drops Under $90, Russia Prepares For Great Financial Crisis With $60 Oil "Stress Case"
The plunge in the price of crude oil in the last few months has many global-recovery-truthers questioning their assumptions. Between slowing growth expectations, US (and Libya and Iraqi Kurds and Russia) supply, and Saudi Aramco cutting prices (argued as maintaining market share but has the smell of a quid pro quo over Syria), oil prices have broken below $90 today to 17-month lows. However, for some major suppliers there is concern that more pressure is to come, as Reuters reports, Russia's central bank is working on measures to support the economy should oil prices fall by as much as a third or more, as First Deputy Governor Ksenia Yudayeva as saying the central bank was working on a "stress scenario" that was likely to envisage an oil price of $60 per barrel. Of course, as we noted previously, there is always the 'oil-head-fake' and as one analysts noted, "the main OPEC countries would experience budget difficulties long before that and would have to take action to cut supply."
There are numerous reasons for the drop in oil prices (as Ransquawk summarizes),
Overnight we saw Saudi Aramco cut official oil prices for Asian customers in November by more than expected despite oil price weakness and oversupply with traders seeing a price-war for market share. Analysts at Commerzbank suggest that the OSP cuts gives a rise to doubt about OPEC's long-standing strategy of striving above all for price stability. [ZH: one can't help but wonder if this is some quid pro quo to the US - heading into elections, post-QE - in return for actions in Syria]
Excess supply emerging out of Libya has weighed over September, with the National-Oil-Company targeting 1mln bpd within the coming weeks.
Furthermore, OPEC have still held back from intervening either verbally or physically, signalling they are comfortable with the current fall in oil-prices. The next OPEC meeting occurs in November.
Elsewhere, Iraqi Kurds are to triple their oil output by the end of next year to 1mln bpd.
Of note, Russian supply has increased by 0.9% M/M in September and is thus providing further supply into the market.
* * *
Some analysts have also pointed out that the continuation of global growth concerns will continue to weigh on oil prices.
* * *
But, as Reuters reports, Russia is preparing for a further sharp drop in oil prices...
Russia's central bank is working on measures to support the economy should oil prices fall by as much as a third or more, a senior official said on Wednesday, showing growing concern as the rouble slides and Western sanctions take a toll.
Interfax news agency quoted First Deputy Governor Ksenia Yudayeva as saying the central bank was working on a "stress scenario" that was likely to envisage an oil price of $60 per barrel.
This would be added to three existing scenarios for the central bank's policy outlook for the next three years, and compares with a $100 assumption in the 2015-17 state budget adopted last week.
"The purpose of this scenario is to prepare a shock scenario to work out an action plan which we would implement to limit negative effects," Interfax quoted Yudayeva as telling a conference.
...
The central bank's current base scenario also assumes the oil price will recover above $100 per barrel for the next three years. Even then, it predicts only modest economic growth.
Commenting on the bank's new stress scenario, Finance Minister Anton Siluanov said that his ministry didn't plan to adjust its own projections used for budget planning, which he said factored in a possible oil price as low as $80 per barrel.
"The forecast of the central bank somewhat differs from that of the government. There is nothing terrible about the fact that they consider a wider range of possible changes in price parameters," he said.
...
Macro-Advisory analyst Chris Weafer said in a note that talk of emergency measures such as capital controls did not indicate any fundamental shift in policies. Such contingency planning was normal good business practice and "does not indicate that the central bank, or the Kremlin, has changed its position", he said.
Were oil to fall below $75 per barrel, the central bank could be inclined to back-track on its plans to float the rouble next year, he said, but added that this scenario was unlikely. "The main OPEC countries would experience budget difficulties long before that and would have to take action to cut supply," he said.
* * *
Finally, do not forget the oil head-fake...
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Wait a second Tyler. Doesn't crashing oil prices portend deflation? Wouldn't deflation destroy the most debt ridden economies first? I thought the entire idea of inflation was to save the economy by making debts payable. Isn't Russia in better shape by having much less debt, both Government and individual?
It looks like the West is going for the jugular on both China and Russia, right here right now, but I don't see how our economy holds up better with a crashed oil price.
I'll take that chance. Thanks just the same.
Print trillions of dollars and what do we get? Deflation.
Ben Bernanke and Janet Yellen might as well be Chris Angel.
Or Satan.
where did we print trillions? I did not get any checks and don't see any wheelbarrows.
You need to speak to the above mentioned Chris Angel.
......or Satan
An Israeli-Iran War will make all this talk of cheap oil very moot.
LOL. Strange oil market, huh? Market? LOL.
The Russians should use their reserves to buy up all this cheap oil, and put it into storage below ground in old wells. Increased demand means prices will go up. Hey if GS can manipulate the market why cant the Russians.
Come on with $60 oil already so we can blow this shale myth bitch up like the bullshit it is!!!! Murica!
I'm crazy. But I see oil dipping below 30 dollars a barrel when this Ponzi scheme collapses. Interest rates will absolutely kill the price. Then again, what do I know?
Hey "Doofus",
Screw your stupid "angry sinner" blog, screw all the click-bait junk you throw out, and screw everything else you peddle here.
@COSMOS
Why the fuck don't you think they already do?
You would think that China would unload some US treasury notes to hoard some of this oil.
Buying food to put on tables, or buying oil to put underground. Tough choice, mmm? What about the Russia own production? Should Putin buy that too, in order to keep prices elevated?
Note: GS and the likes are able to "manipulate" prices because the greatest energy consumers are in Western countries. If the energy consumer in the West are not able to consume (because the prices are too high, or because they are banckrupt), the consumption will decrease. Russia is able to earn money to buy anything that it not produces (a big chunk of its economy) thanks to its western customers. Who's the villain now?
http://en.wikipedia.org/wiki/Useful_idiot
Whale oil
Long Moby Dick.
<heh, heh....now that I read that back.....>
Moby Dick is a sperm whale.
Whale oil beefed hook.
Come on evert time the russians are misbehaving they drop the price of crude.... $40 to $50 sbould crush them like when they invaded Georgia
What will it also do to the lavish lifestyles of Saudi princes and United Arab Emirates? Dubai? You think they will like that, hmmm?
Maybe you did not get any checks but your buddies in the Hamptons did,your not realy that naive.
"Tyler" isn't one person, Bob. It's a team of writers.
But moving on to your question, Russia isn't in less debt by choice - it's because it defaulted in 1998 and devalued its currency. In other words, no one's that eager to lend to Russia, although they recently sold some bonds for 9+%. Putin needs to sell oil at roughly $110, but it's only a little over $90 now. Without that high priced oil, it needs to either cut back or borrow still more.
Additionally, the Ruble's fall relative to the dollar and euro mean that imports feel a lot like inflation.
The annual Russian government budget forcasts a price for oil. 2 prices actually, domestic and export. They then set a fixed amount of tax on each ton sold. If the market price falls below the tax they demand, its the producers that go into the red initially. The govenment pain comes later.
in 2008 th us economy crashed-----but so did the rest of the worlds economy crash.
the world will be a different place when it is 'decoupled' from financial bubble blowups in the west. in fact, that will only happen when the west has been financially superceded by russia china and whoever else.
that probably isn't going to happen as fast as you think. we're all in this giant debt bubble together.
Again the price of oil has more to do with the promises made based on the revenue at a certain number than the actual consumption of the commodity.
Maybe world governments should base the promises they make on what they actually take in instead of what they believe they will obtain in the future.
A pure pipe dream. Like stopping Ebola at one apartment complex in Texas.
Again the price of oil has more to do with the promises made based on the revenue at a certain number than the actual consumption of the commodity.
Exactly.
Didn't mention ISIS Oil Ltd. production numbers.
It mentioned Libya.
Those numbers get filed under the CIA black budget that no one is allowed to see under penalty of double-secret probation.
And btw, based on your avatar, shouldn't your name be Truckler & Koch?
What about #JSIL?
https://twitter.com/hashtag/JSIL?src=hash
Larvae of one type of midge can survive for three days in liquid nitrogen. The temperature of liquid nitrogen is -321 degrees Fahrenheit.
Your screen name is well chosen.
Could we try that test out on some bankers? Their hearts are blocks of ice anyway, so why not make the body match?
I appreciate useless facts, makes for a different type of entertaining trolling :)
plus you learn useless facts
Whats that Spandau Ballet song again....
"True"
A hah hah hahhhh
I knooooow this much is true
The bane of every prom in the 1980s. And 90s. I know. I lived through it. It wasn't pretty. But it was better than things are currently.
I was thinking more of "gold"
http://www.youtube.com/watch?v=ntG50eXbBtc
Economics of Shale Oil production may be stressed at $60 too...there goes US production.
Have to factor in transportation with prices that low
By the way, that article isn't describing fracking (which wikipedia covers under Tight_Oil and Hydraulic_fracturing), and those are old numbers even for oil shale processing (which is, so far as I know, still only experimental in the US). Last time I looked at the order of economic viability it was (best to worst) oil sands, coal liquefaction, fracking, biomass thermolysis, oil shale.
That also takes out all profit from Alberta tar sands oil.
Cold war trade, Russia/China repatriates from crappy EU countries, crappy EU and emerging markets seek the safe haven = USD. Oil drops. Sink Russia's ecomomy further by devaluing it's energy sector, all the while America gets value for the oil via the Saudis. Russia needs a war. Watch Iran and Saudi Arabia, the proxy war is being fought now with IS and Shia' militias, PKK caught in the middle while Turkey siphoning the black market oil.
You got it backwards, Russia doesnt need a war, it's USA that needs a war, desparetly.
Ha. So what do you think the NAS SPX and RUS will be trading at w/oil at $60? And how many Frackers will go belly-up? Bring it! I look forward to see what happens!
Take out fracking and America's economy is Hooverville all over again. 100% participation in the FSA.
OTOH lower oil prices might put some of these overpaid roughneck grunts out of work in North America.
WTI Oil Weekly shows long term down - has for several months
http://bullandbearmash.com/chart/wti-oil-weekly-reverses-closes-reverse-...
USD strength should help drive oil prices lower
Frackers need $80 / bl. to survive.
That's for the WELL funded ones. The little players.....$100 +
But even the well funded ones still need constant flow of dollars. If the banksters and the Ponzi players get panicky before $80.....watch out. Frackers will be fracked but good.
Glad I didn't buy into the fracking fad.
If trend continues, will be parking of rigs.
Won't be the first time.
8065 wells in the Bakken each producing 130 barrels a day.
That's right, 130 barrels per day.
https://www.dmr.nd.gov/oilgas/stats/historicalbakkenoilstats.pdf
http://www.dtcenergygroup.com/bakken-5-year-drilling-completion-trends/
We're just as proud as punch. 130 barrels a day. 130 barrels a day @ $80 a barrel, why that's $10,400 per well. And at $100 a barrel?
You do the math.
Flash in the pan.....bitch.
http://www.ogj.com/content/dam/ogj/print-articles/Volume%20110/Oct.%201/...
Get outta here!
These Estimated Ultimate Recovery charts were done by the same folks (Oil & Gas Journal) who gave us the 96% overestimation of the Monterey Shale Formation Reserves.
But put me down for 5000 shares.
You could have listed out an equally weighty list of reasons for oil to make some major move in the past couple of years. But it hasn't. Suddenly, now supply/demand and geopolitical events matter?
Or is it the US is waging war on Russia? Seems to be working.
It's not the slowing economy - it's the slowing QE. Given production levels and given a slow economy - oil should have stayed in the $75 to $85 range. That it was up over $100 is more to do with QE money pushing it higher and QE dinging the USDollar. That is ending and now oil is just returning to where it should be. Of course, it could drop a lot more when the economic bubble pops, but that is all part of QE.
It's good to see Libyan production up -- I'm just sure that the people will benefit hugely from the increased revenue, right?
I guess theres no need for tesla then....
Never was.
In the USA there's not anywhere near enough electricity infrastructure to power a couple hundred million electric cars, especially the $100,000 kind. Not even ten percent of 'em. The dream of electric cars is a sick joke.
Yes. If/when next generation nuclear power then electric cars might work out...but not with oil/gas run electric plants and solar and wind only.
Best post in quite awhile...
Tesla doesn't save anything...
Never mind the $1,000,000 kind.
http://www.rimac-automobili.com/
I was thinking more of "Gold"
http://www.youtube.com/watch?v=ntG50eXbBtc
As low as $20 per barrel
The lower it goes, the more collateral calls and margin calls triggers which leads to more panic selling to meet margin/collateral calls
It is an avalanche due to insane leverage.
Hence the huge panic at $90 WTI
Same with stocks, bonds, copper anything.
How low did it go in 2008? And what is the difference or rather the consequences that would be different now in 2014/2015 than in 2008?
as low as as $32 but leverage was quite lower than now
It will be like double or triple 2008 which is a great thing and I am not joking at all
Only two options left at this point:
1) Manually trigger another Lehman
2) World abandons the financial system
Pick one.
People cannot be bombed to participated in a video game network like this current system. They won't care even if bombed
Are you the king of non-sequiturs, Bob? You don't make a lick of sense.
Seems like number 1 would be the favorite. Humans are creatures of habit.
Last I remember that happening was 1984. The whole biz here went belly up. A complete domino effect. Bank failure. People actually went to jail. One very old couple that owned a clothing store, murdered. Got wind of the bank failure & withdrew their money the day before the bank failed. Murdered in their home where they lived close by. Throats slit. Unsolved to this day.
Western demand keeps dropping, and those pumping a-rabs have got to sell the shit to somebody, so price cuts are what the doctor ordered. Soon the China collapse will surface, and demand will go further in the tank. We have seen maximum demand for this cycle, and it looks like there is a lot of room far below us. This will enable the consumation of the 2008 collapse, and it's continuation under the 2014 (or2015) banner. Further reduction in demand follows. And face it, we have to collapse the economy if we are going to have the 'die off' that the Oligarchs want so they can have all the money they so deserve. But that goes past my 20 year care-horizon, so it's not anything I will worry about. I'm worried that idiots will further infest the government, and nuclear war will be unleashed within that 20 year window. There are far too many people that don't carry that fear in every bone, and with stupid on the rise it is too close at hand.
Oligarchs may be wising up and snuggling up to a more biological meme. Nuclear war would tear to much shit up thus causing major infrastructure re-builds.
The Americans won't let demand tumble. Instead of the gas guzzlers and lifted trucks that subsidized Americans drive themselves to the STarbucks drive through in will be out done by "Save Tahoe" bumper on their gas guzzling superSUVbus and loud lifted 4 wheel drive Tonka trucks for every member of the family. IF not, somebody will give the Mexican meth smugglers access to SUV-style gas guzzling boats, tanks and planes to illegally cross the border with on the equity line on their counterfeit subprime backed financed house. If not, I'm sure one of them will access a few helicopters to bring that shit into the US and that's going to require---MORE FUEL.
Quick- where's Pablo Escobars' personal assistant? Maybe they'll convert some of their Boeing Jets to unleaded gas guzzling airbuses instead of that silly jet fuel they've been using all along.
I'm sure a warmongering Bushite neocon somewhere will make for darn sure innovate a way to get more wasteful use of oil as the Federal Reserve keeps printing. At the very least, some ecoterrorist somewhere on big oil's dime will orchestrate another oil spill to create another "shortage".
CHina's not going to collapse, however I do see them and India conserving their oil use which won't kill demand. I would think that the sales of rickshaws would go up with increasing prosperity that way.
There's a battle to push that little bit of BIS legislation through congress that is the final cornerstone for the SDRs. Passage will definitely devalue the dollar restructuring reserves and be absolutely bearish for the big oil companies.
Bankers vs big oil the battle rage's.
We haven't had a girl on ZH in years, can you please provide some proof.
what about cougar, miffed Microbe or mscreant?
that aside molly your comment is fascinating, can you elaborate?
What about Amerikan Parrrot?
long term crude oil price does look ugly,
http://www.barchart.com/chart.php?sym=CLY00&style=technical&template=&p=...
Even with $60 oil, the revitalized Soviet Union has got to be a peach of place to live with a vital strongman like Vlad in charge of the regime.
Are most Zero Hedgers moving to Moscow, or being naturalized further east in Siberia? What's the scoop?
The Siberian girls are real nice in bed. Vladivostok is a gorgeous seaside town, kind of like San Francisco. Three of the biggest rivers in the world and their tributaries criss cross Siberia. Nice clean water and air. Not bad of a scoop.
Why move? Putin has America by the balls and he andhis Chinese family will own us in a few years.
Did your daddy touch your special place?
I'm always hopeful to one day see Opec nations, instead of working together and cutting supply, rather making the promise while stabbing one another in the back by cheating Muslim-style.
Way to defer the subject. The climate would not be the best. But the life, while simpler is probably better in many ways. I would bet the avergae Russian is happier than the average American.
Commodities in general are taking a whallopping, which is to be expected with sagging demand due to near-zero economic growth in Europe, deep troubles in the U.S. with driving (consumption of oil) tanking (pardon the pun), and Fed tapering, also with expectations (tho false) of interest rate hikes in 2015.
QE always puffs up commodities, but we're way past that peak now. Global investors (the kind looking for good returns) are pretty much soured on precious metals, soured on almost all hard assets, and are still rolling the dice in paper assets and getting big returns.
So between now and when we have a BIG crisis of some kind - much bigger than Ukraine, something that would really rock the paper confidence, like Europe sliding back into financial crisis or an Israel-Iran war or such, then commodities (including PMs) are going to be in a down trend.
I'm guessing a comparatively stronger dollar and commodities down trend for 1-3 more years. A stacker's dream come true, actually.
Then - KABOOM! It'll be a stampede out of paper again.
"As global demand recovers, supply lags demand, and price skyrockets"
Or the original, longer title:
Any zh commenter who believes it will have his password changed
Was wondering why a company like Rockefellers went all noble and got out of the oil business that made them - the bastards saw this comming!
we need usd at 100 and oil at 50.
oh that is what we have, its just no one is admitting it?
well than we need to export moar earl and drive the price to 240 and then put the usd at 50.
oh thats the plan? okie doke.
we need oil in contango with the dollar in backwardization.
flip it like you own it
everybody is predicting higher prices.................
There foer me thinks down big time............
The market has to destroy the most players it can.............
60 buk oil is not out of question.......
or even 40............
Bets that it is still profitable at 40......
Is still profitable in saudiaribia at 5 buks delivered to usa.......
that is the floor....
The end of the stone age was n0ot the end of stones...................
Putin won’t do shit.
When Putin came into power the first time, I used to tell me friends that he will be going far and will be causing some serious sleepless nights for the West. Ofcourse they laughed me off as Russia was totally beaten down at that time.
I have been following Putin since his early days, what he was doing and saying. I think he has reached his limit and he is not the World Leader that a lot of us expected him to be.
He might be a great leader for Russia and will look after his own and Russian interests but will not do jack shit on the international arena in matters that does not concern Russia directly.
When Libya got plundered, all he did was some angry press conference because killing Gadhafi was not “mandated” at the UN meeting.
He took the MH17 accusations on the chin and didn’t go further than some “impressive and intelligent” presentations, rather than spilling the beans.
He accepted the ceasefire in Ukraine whereas you would have expected him to chase them all the way to the presidential palace in Kiev and right up Porky’s ass, to send a message, though he did take Crimea, Russian interest.
Read history of Russia and China. They have never projected their power abroad, not talking about Fleets and military but the Will. They never had the will. Mongols/Tatars, in their heydays, bitchslapped both China and Russia. There is a reason the Tatars and Cossacks have a special place in Russia i.e. they get shit done.
Russians can sing some songs of bravery and punch some duffel bags and barrels to show the Russian strength, while drunk on Vodka, but come real situation, not so much. I mean its not Putin’s fault that you indulged in his sporty pictures and thought he is going to be the savior everyone is waiting for. He overdoes the macho image, because he actually isn’t.
To project power on the world scale, you either have to be a fearless Warrior type or a shameless Psychopath.
He is neither, maybe just to minimal extent. He wants to be “partners” with the West not a contender, as he keeps saying and eat over rated fish eggs and overpriced bubbly in his palace like all wannabe Russians and indulge in some boy’s club kind of sports from time to time.
US will get the gas pipeline corridor through Syria, Assad will stay in Damascus and Russians at the port of Tartus. He has probably agreed to the arrangement. He will not budge until NATO is in his bedroom. Its just a Russian psychic, as shown in history, and then Russians will fight bravely on their home turf.
(US and ISIS getting into Damascus will be a game changer though, and a warning for Israel)
Russians didn’t even conquer the Central Asian states. They were given to them by Teddy and the drunken fat Slob with a Georgian incharge.
I mean he has all this gas to sell, his bread and butter, and all this time he has had no alternative payment and pricing method and structure?! Apart from getting some of his ministers to give out intelligent and detailed presentations, he again won’t do jack shit on that.
The Chess player couldn’t foresee it? Like he couldn’t foresee Gadhafi being taken to the woodshed? And he still cannot foresee that Empire will keep striking back and will not backoff?
I don’t even think he has a valuation model for his gas and a pricing structure. Its just, dig a hole in the ground and put the pipes and sell gas for enough money to cover the costs and some oligarch profits. He cannot even recover his money from Ukraine for the unpaid gas?!
What is a barrel of oil or cm3 of gas worth? Hard earned 50 bucks or printed 50 bucks?
There will be no PetroRuble or PetroYuan or PetroGold even.
PetroRuble – Russia can only trade to the extent pf what the other country can sell to Russia, and the other country might still be dependent on USD for the inputs of its produce and exposed to USD manipulation.
If you find it hard to understand the concept, then think of it this way. There is extremely high demand for water and short supply in Sahara. You must be able to charge astronomical prices for bottled water there then? (Some MBA would possible think it’s a great idea and Nestle should expand into Sahara… lol)
Petro Yuan – Pegged to the USD and can be printed.
Petro Gold – Will you really buy oil or gas with your physical Gold?
USD will stay as long as there is oil trading, albeit in seriously devalued form. That is the sad reality. Uncle Sam is not producing oil for sale, so no skin off their nose, and they’ve got big guns and the will to use! When the world will abandon oil, they will abandon USD, it will be a gradual process.
And guess where does the famed gas pipeline from Russia to China enters Chinese territory? Right through the Xinjiang "homeland" of Uyghur people who are ethnic Muslims. Surprise Surprise! They might want independence.
Coming soon, another episode like Ukraine, but in Chinese this time?
Those people who followed Baghdad Bob, do you know how they felt afterwards when Baghdad fell? You might find out if you keep rootin for Putin like that.
Sorry folks, he is not the bare-chested Knight on a Siberian horse coming to the rescue. Constitutional dilemmas of US citizens and oppressed people in the East are not his problems. He just wants to sell gas to his "partners" and get some respect on the negotiating table.
Lots of russians i've met have preatty much the same judment about Poutine. They're very surprised to hear that he's considered as a hero in the west.
You're right, Russia has never be an Empire, only a defensive country fighting for its own interest. For that they're redoutable, kicked Napoleon and Hitler's ass!
I'm living in France, I'm US/French citizen, and let me tell you the constitutional issue is not just a US one. In europe, with the UE and the ECB we're following the same path.
You're right, we should stop fantasized on foreign leaders who are fighting the empire like Chavez ( only in France) , Putin or the Chineses, and fix our own issue in our own country.
They took away our democracy, violated our constitution, it's our duty to take it back. No matter what happen in other part of the world.
That's what I'm trying to do, modestly, at my level.
Good analysis but your conclusions are wrong. Did ya ever think they all might be on the same team and this is all just theater for the masses? They're all just actors playing their parts, no more. How do we know Gadhafi died? Just because we all heard about it through the box in our living room and maybe some of us saw the supposed video doesn't mean shit. Go look at all the pics of Gadhafi doing strange handshakes with world leaders. Call it masonic if you will but for me its just confirmation that he was definitely in the club and for whatever reason needed to appear to be removed from office very "violently."
You could be right, I have no proof for or against it but will say:
- Sometimes the club members also turn against themselves, like gang warfare. Honour among the theives etc. Eliminate weaker members and consolidate power.
- To be part of the club, you dont have to swear allegiance explicitly but it can just be an implied understanding. Know your place and dont cross the line.
"In the end, there can only be one."
in a bear market, supply does not matter. Consumption is what matters. Once prices start falling, expectations of lower prices sets in and buyers reduce inventories downstream. The issue with $100/bbl oil is that it is not justifiable except for the budget needs of the supplier countries.
pretty good:
The AngloZionist Empire is at War with RussiaThe great chess game between USA and Russia now finds its issue in strangulating the price of OIL, during a period of world recession.
Exactly as Reagan initiated the same thing in the period 1982/1984 (using Saddam's Shia/Sunni Iran war as stalking horse to prod Saud's Sunni support to opening wide the oil tap).
By using the Saud pump, aided by Cantarell Mexico find and North Sea Oil bonanza; as well as energy efficiency improvements in Europe (not so much in USA); Reagan managed to bring down the Soviet MIC complex--star wars scare included-- which desperately needed high world oil prices, to succor its inherent economic defiencies; particularly as the Afghan adventure had Soviets by their short hairs.
The soft oil price then defeated Gorbatchev and his crumbling empire.
But will the soft Oil price ploy defeat Putin on the backs of demand shrinkage and shale oil plays in USA?
And can the western world's hyperinflated, steroid pumped, stock and bond markets-- drowning in corporate/state/consumer debts-- stay cohesive enough on its globalized feet to ensure the future demise of Putinistan, now allied to Chindia?
Is the today's 2014/2015 geo-political world reminiscent of 1980-1990 decade of triumphant Reaganomics?
64000 $ question ! (add a few billions to make that at par with today's inflated norm).
The Great Game has continued for so long because Russia and China always play on back foot.
Anyone playing against them have all the time in the world.
Pissed off Mongol hordes would have been riding through the Pacific Ocean to send a message.
..."continued for so long"...
That is some affirmation.
You forget that Putin/China have only become part of the great game since 2000; aka since 14 years, when WTO gave China special status. A show run by the NWO since Reaganomics and Berlin wall collapse made it unilateral.
14 years is not a long time to have become members of the power club. For Putin, its the Oil hike that reinstated him and allowed him to shed the Elstin "smear" from Russia's legacy by becoming king of Rosneft/Gazprom. For China, it was the outsourcing stampede that Bush Snr/Clinton/GWB participated in, making them into world factory.
That in the course of 14 years China/Russia/India now share the lime light with the West and are now shaking the EZ zone Euro cocktail to its very foundations, shows how much the delusional power construct of the West, over the past thirty years, has dug its own grave.
We are our own worst enemy, to the extent that we elect this corrupt political class on both sides of the pond.
But Putin and China have greatly benefitted from the global games of the same western oligarchies that have created China Inc (thanks to outsourcing) and Putinistan (thanks to Oil price hikes resulting from globalization)...
So its not China and Putin regimes who have created their own wealths with their own endogenous creativity. They have benefitted from the steroid pump of globalization, epitomized by the Apple/Foxconn/Walmart model based on slave labour arb.
And that will have consequences for them, as all forms of steroid pumping have resultant blowback when that money pump cavitates like it seems to be doing now!
You probably know much more in detail about the subject, but my observations and understanding will be:
Outsourcing of manufacturing to India and China was inevitable as the Western economies and labour markets became saturated, to the extent that even the individuals are heavily in debt.
Outsourcing was only dont to countries which are docile and would never become contenders. The possible contenders Japan and Germany, were already brought under control with US bases to show for it, plus other limitations.
But now, we are entering a terminal phase were energy prduction is reaching its limits and will start to decline, if not declining altready, and debts are not manageable anymore.
We have even harvested our future expected profits.
What is a commodity or labour worth, a hard earned buck or a printed buck, thats the question a lot of people would be starting to ask.
The article is way over analysed.
Early fall is the shoulder season for oil pricing as the driving season is over and the winter heating season has not started so demand is lowered and, so is the price ; happens every year.