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Why Oil Is Plunging: The Other Part Of The "Secret Deal" Between The US And Saudi Arabia
Two weeks ago, we revealed one part of the "Secret Deal" between the US and Saudi Arabia: namely what the US 'brought to the table' as part of its grand alliance strategy in the middle east, which proudly revealed Saudi Arabia to be "aligned" with the US against ISIS, when in reality John Kerry was merely doing Saudi Arabia's will when the WSJ reported that "the process gave the Saudis leverage to extract a fresh U.S. commitment to beef up training for rebels fighting Mr. Assad, whose demise the Saudis still see as a top priority."
What was not clear is what was the other part: what did the Saudis bring to the table, or said otherwise, how exactly it was that Saudi Arabia would compensate the US for bombing the Assad infrastructure until the hated Syrian leader was toppled, creating a power vacuum in his wake that would allow Syria, Qatar, Jordan and/or Turkey to divide the spoils of war as they saw fit.
A glimpse of the answer was provided earlier in the article "The Oil Weapon: A New Way To Wage War", because at the end of the day it is always about oil, and leverage.
The full answer comes courtesy of Anadolu Agency, which explains not only the big picture involving Saudi Arabia and its biggest asset, oil, but also the latest fracturing of OPEC at the behest of Saudi Arabia...
... which however is merely using "the oil weapon" to target the old slash new Cold War foe #1: Vladimir Putin.
To wit:
Saudi Arabia to pressure Russia, Iran with price of oil
Saudi Arabia will force the price of oil down, in an effort to put political pressure on Iran and Russia, according to the President of Saudi Arabia Oil Policies and Strategic Expectations Center.
Saudi Arabia plans to sell oil cheap for political reasons, one analyst says.
To pressure Iran to limit its nuclear program, and to change Russia's position on Syria, Riyadh will sell oil below the average spot price at $50 to $60 per barrel in the Asian markets and North America, says Rashid Abanmy, President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center. The marked decrease in the price of oil in the last three months, to $92 from $115 per barrel, was caused by Saudi Arabia, according to Abanmy.
With oil demand declining, the ostensible reason for the price drop is to attract new clients, Abanmy said, but the real reason is political. Saudi Arabia wants to get Iran to limit its nuclear energy expansion, and to make Russia change its position of support for the Assad Regime in Syria. Both countries depend heavily on petroleum exports for revenue, and a lower oil price means less money coming in, Abanmy pointed out. The Gulf states will be less affected by the price drop, he added.
The Organization of the Petroleum Exporting Countries, which is the technical arbiter of the price of oil for Saudi Arabia and the 11 other countries that make up the group, won't be able to affect Saudi Arabia's decision, Abanmy maintained.
The organization's decisions are only recommendations and are not binding for the member oil producing countries, he explained.
Today's Brent closing price: $90. Russia's oil price budget for the period 2015-2017? $100. Which means much more "forced Brent liquidation" is in the cards in the coming weeks as America's suddenly once again very strategic ally, Saudi Arabia, does everything in its power to break Putin.
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The price drop is due to three factors and has nothing to do with any secret Saudi-US deal.
It's caused by a weakening world economy, a stronger US dollar, and the temporary liquid energy glut resulting from non-traditional fossil fuel production such as the fracking and tar sands production in Canada both of which require $90+ oil to remain profitable. This price drop will prove short lived, months not years.
I bet I could knock all of those 'aggots further than The Duke could. I then be buying the best in the house for you guys. And a slab of that there Texas beef.
Good Article but when all those sanctions tabled took hold, something not commented on in this thread, this was in the cards.
http://en.wikipedia.org/wiki/International_sanctions_during_the_2014_pro-Russian_unrest_in_Ukraine
put on the goggles and hold on this might get worse before it gets better.
"The Triple Entente?"
http://en.wikipedia.org/wiki/Triple_Entente
This goes back pre-WWI and explains alot about today, believe it or not!
It was the French and British that controlled the ME,... with the British gaining naval superiority. Napolian was a limited threat--, once gone, France took a back seat after the Franco-German War! Germany had come into their own during the latter part of the 19th c., and Russia and England were paying close attention as was France from North Africa/ Egypt & Suez Canal/ Ottoman Empire (Turkey).
Today Russia has its eyes on the prize? The "TURKEY", Balkani9zation 2.0's/ Ukraine/ Armenia/Azerbaijan/Turkministan[?]? The Kurdistan Area from Syria, Turkey, Iraq, and Iran means a buffer-zone just as the British appreciated with India's overland-trade up until 1947! "The Great Demarcation of India/ Pakistan/ Afghanistan?!? Independence... when India raped the Pakistani's!!!
Saudi Arabia must pay its 1000's of useless freeloading sheikhs millions and millions of $$$'s annually (mucho billion's if not moar?) and collects no taxes except from the proletariet, whom get their only paycheck from the energy-infrastructure. Note: The south-east {SA} is shia and much oil revenue is produced in this secular semi-volatile geography in which I don't believe they're willing to produce for less than cost... hurting Iran or Iraq dominate shia gov't's, or for that matter Russia???
Perhaps if the reader reads between the lines of a century-old plus 'Detente' they will see that history is just a brief shadow of the past, until the Nuclear Age engulfs us all?
jmo
Ps. The British have gotten the USSA in every war imaginable, as have the French. While it's been a century since the Qing, Russian Tsars, Ottoman Dynasty's have met history's dust bin the UK is nothing but a floating rock of basalt, and France a socialist armagettan on the cusp of fragmentation with Germany leap`frogging to the East as quick as the Bund can de-dollarize with Russo-China the magnet for anyone other than Saudi's religious police meddling in the Levant that is no-moar than desert-strip between Jordan and Turkey's Euphrates having absolutely shit in value other than a BandarBush/CIA/Mossad tryst de`jour-- FAIL!
jmo
* ze fait accompli via a satanic sabbatical requiem of pyrrhic vic]er[torie?
Earl, I'm not going to spend my time dissecting your rebuttal.
Long story short, it was always about supply routes.
.
@ YC
Supply routes, moar Supply routes and even moar`ish Supply routes via rail, sea and AIR?!? Funny that the USSA still uses trains to transport oil and NatGas {CNG/LNG}. And, we still use merchant-shipping to transport LNG/CNG?, AND fossil fuel...
Luckily for the energy starved world, oil and natgas is a liquid when processed. Unfortunately or fortunately oil has a ~ 10:1 payback, but... and it's a big Butt, the low hanging`fruit in the subterranean armpits, has pretty much been ?all? harvested, so well have to make do with NatGas by 2050.
Plenty of NatGas to go around for centuries, but as you say... who, or whom gets to control the routes. I'd bet on China and Russia in their own back yards versus a ocean or two away in the west where naval superiority means shit today. Funny how the Nuclear Equation levels the playing field?
We could go back to good ole-fashion coal? or fight to the end over ME Oil.
Perhaps the best route for all parties is to sit down and talk alternatives. H'ah, that ain't gonna work... besides, wars... regional or civil? can fix a permanent solution into a temporary quagmire keeping the symbiotic MIC & Energy Program in a perpetual mutual financial paralysis of the 0.001%'s utopian's insatiable organism`ism!
Seriously, I'v got a list of reading references for ya, but I'll leave you with these 11 short pages by Geoffrey Kemp and Robert Harkavy that simplify in layman terms the jist of why routes don't matter, but only the power of 'a tour de`force',... 'Ain't da`h bArReL OF A nuK`Key a BiTcH'?!? http://acc.teachmideast.org/texts.php?module_id=4&reading_id=120&sequence=15
`"The First WW for Oil" :: "The Berlin-Baghdad Railroad-The Great War"`
http://archive.worldhistoria.com/the-first-world-war-for-oil_topic10905_post202613.html
http://www.globalsecurity.org/military/world/europe/de-berlin-baghdad-3.htm
http://en.wikipedia.org/wiki/Syrian_Railways
http://en.wikipedia.org/wiki/Hejaz_Railway
Please realize that these were the supply routes for energy that ran parallel throughout the ME with the needed physical infrastructure still used today, as was, and still is underwater seascaping for communication lines and energy submarine pipeline transport. Nothings changed except that the Chinese want them moar with Russia's muscle.
Remember, the Russians reached Berlin first and held it from the Americans, and with it the thousands of creme-of-the-crop, accomplished scientist that cared less who they worked for as long as they could practice their religion of invention. Most scientist that wanted out left long before the war began.
So, It comes down to 'Fuck the European's' nulandnazi style...
jmo
Ps I hope your still making money... via Singapore Malacca strait X Bosphorus/ Morocco strait X USSAs`Suez Anal?ingist X Hormuz strait ass`ripper... shootout`sho`e'nd crossfire'd?
Obola and his EUoligarchs have miscalculated. The Russians will survive the winter with depressed oil and gold prices - their new friends in the East are undermining the sanctions by supplying ready access to western markets...
+1 for Obola
The Russians have survived a lot worse shit than this. This time might really BE different.
Actually the Soviet Union withdrew from Afghanistan and subsequently collapsed financially and politically the last time that Saudi Arabia dumped Oil on the World Market back in 1986.
Oh I enjoyed $0.79 per gallon Gas and $10 per bbl OIL. I remember it all too well.
Of course the Dow Jones collapsed following that in 1987 due to the Savings and Loan debacle. Texas properties were completely depressed and I guess that the S&L's just had too many non performing mortgages on their books.
But the goal of BANKRUPTING THE SOVIET UNION was achieved. (That was the deal between the House of Saud and the Reagan Administration.)
Same as it ever was.
But, this time, Russia is the SECONDARY TARGET. ISIS is the PRIMARY TARGET and the Saudis are fearful of overthrow...much more than fearful of Iran. In fact if ISIS prevails you can bet that they have their sights set on the destruction of the Shia in Iran. (That is why Iran has troops on the ground defending Baghdad.)
ISIS is actually angry that the House of Saud does not go to war against Iran. The House of Saud is not extremist enough for ISIS goal realization.
This is NOT ABOUT NATION GOING AFTER NATION.
This IS ABOUT setting up a new caliphate and a reinstitution of the former Ottoman Empire.
I'm a noob here, but to me, the concept that Bakken-Frac and Cdn OilSands "growth" are the rationale for the House of Saud dropping the price to diminish competitor technology economics doesn't fit. The Canadian oil sands are barely above stall speed - saddled now with difficult economics - silly/stoopid capex, and the winners are hard to find. No-one seems to be rushing out to cut steel for oil sands, except a handful of BIG owners CVE/CNQ/MEG/CPC who have spanky reservoirs and aren't naked raw bitumen sellers. I support the premise that squeezing VV Putin is the goal. WTF, it helps squeeze ISIS too, for that matter. Re: Bakken, I have 0-understanding of this, but the order books of suppliers & contractors seem full - makes sense, lots of gas and diesel in that oil, esp when compared with Diluted Bitumen/Crack Spread (...stop your dirty mind now!). I am thinking that anything that bruises Vlad & cuts Murkan pump gas/diesel prices keep the great (and mobile) unwashed tame and happy. As you say, JMHO...
All good except how much is Vlad really getting bruised? Not much I suspect, because on other fronts the US and Vlad have essentially worked together to deflate the value of the ruble. Now Russia produces oil based on ruble costs, but sells oil on dollar revenues. Connect the dots. A highly devalued ruble is offsetting the devcrease in dollar oil revenues. Example, in Oct 2013 the ruble was selling at about 32/$. Now it is around 40/$, a 25% drop. Oil revenue at 32/$ and about $100/barrel = 3200 rubles per barrel. Oil revenue at 40/$ at $89/barrel (Brent today) = 3560 rubles per barrel.
Sure his middle class and upper class folks suffer price rises on non-Russian goods, but not enough to hurt his power base, the great Unwashed who benefit from his government programmes run on oil revenues.
So do the math. Vlad is really hurting, eh?
He's already cut his deal and sold Assad down the river. Putin doesn't care about the rest...
thanks victor999, also russia has an agreement with iran for oil for expertise re: plants, so russia can take iranian oil and give it to the chinese, basically coming out well above even, send experts to iran to design plants, creating jobs, and save their oil for higher prices. russia's also signed several deals with Stans to build also creating jobs and linking produce trades. on paper at least it seems russia is positioned to ride this dip...a little easier than alberta, dakota. jmo
I think don't think this is good for Canada too. Our oil is expensive to get out of the ground.
But the real question is: why is the price at teh pump still so high??
Producing the oil is just the first of many steps toward pump prices. It is a complex process involving inventories, refinery limits, the economy and several other factors.
Welcome to the club. There is no country going unharmed when the bankers declare war on the world.
A dentist once reclined his female patient and as he hovered with a drill above her face, he suddenly felt her hand taking hold of his testicles VERY firmly. The doctor froze with a big question mark on his face. The female patient purred sweetly and said, "well doctor, we aren't going to hurst each other now, are we?"
The point is, that Russia can hurt the US/Saudi machinations by simply using hard currency to buy up large quantities of physical gold to the point where it brings undone the paper market.
If your opponent is too tall, you don't try and head butt him. You kick him in the balls instead.
What if the dentist frequently pays women to crush his balls because he likes pain?
Well then, This whole conversation is for shit.
Exactly. And China can use a tiny fraction of its $4T USD to bridge Russia through all of it. Only our long term economic and energy security will be hurt.
Thats a stupid premise. Why in fuck would China, a nation fighting to maintain it's own status quo so fiercely it builds ghost cities, support Russia?
A broke Russia is good for China, cheaper nat gas...
Maxter - $Cdn prices are pretty sweet - check out European mogas and diesel prices. Yikes!
I believe Saudi Arabia has done this is the past and is likely to try and do it again, but the very bearish price action in oil can be seen in many other entirely unrelated commodoties from cotton to copper. Therefore, I am much more inclined to point to the short term rise in the dollar vis a vis other crap paper currencies, and a severe slowdown in global economic growth as the catalyst. Separately, but perhaps even more importantly--how is this price action hitting the shale "boom" guys here in the states? Many of these guys weren't even profitable at $100/barrel oil. You can't have a "boom" without a "bust"...
..."can't have a 'Boom' without the 'Bust'
.
The Arabs are used to play with the oil price downwards every 4 year or so also to wipe out alternative energy by making it expensive that way.
But will the price of desalinated water go up? Just wonderin'....
I don't buy it.
Firstly, Saudi Arabia does not have enough capacity to drop the oil price to $50 - $60. So saying that they will, is like saying that Exxon will lower the price of oil.
They can lower their own price as much as they want, but if they can't make a whole lot more oil appear, all that will happen is that buyers will prefer the cheap saudi oil to the more expensive non-Saudi oil.
This is cheap talk. Show me the pump volume increase or shut it.
Second a drop below $80 will totally wipe out shale oil in the US. You think Obama is going to do that kind of deal going into an election? There would be a whooshing sound as the oil money went to ANYONE other than a Democrat.
Now, the price HAS ALREADY BEEN DROPPING. A FUTURE expansion of Saudi oilpumping won't make a PAST PRICE DROP. So you have correlation issues as well.
On the other hand, make a chart of the WTI or BRENT vs RUB-USD and you get a very, very high correlation.
Here:
http://stockcharts.com/h-sc/ui?s=WTI&p=D&yr=0&mn=3&dy=0&id=p18571222545
and here for Brent Crude:
http://stockcharts.com/h-sc/ui?s=$BRENT&p=D&yr=0&mn=3&dy=0&id=p70806457981
and here:
http://stocks.moneyshow.com/intershow.moneyshow/quote/chart?Symbol=149%3...
Now look at the peaks and valleys.
Oil is matching the RUB-USD performance exactly.
And who is it that torpedo'd the Ruble? That would be Putin himself. Funny, how foreigners dump holdings when you say you are going to seize them to give them to your friends.
If you like you can even look up the days of the 'seizing foreign assets' stories from Russia and compare them to the days when the Ruble dropped.
It is money leaving Ruble-town.
Right, Wrong, Indifferent. I don't care. I just hate propaganda.
The chart of Saudi oil production to WTI price doesn't match. And if the Saudi's were doing volume selling to drive down the price, they would match.
If the chart doesn't fit, you must acquit.
But the Ruble to WTI chart fits like a glove.
Go ahead and down vote me. Too many are using flags like sports jerseys, and becoming mindless fanboys.
"Firstly, Saudi Arabia does not have enough capacity to drop the oil price to $50 - $60. So saying that they will, is like saying that Exxon will lower the price of oil."
The price has nothing to do with supply. The sole purpose of the paper oil market is to disconnect the supply-demand relationship. Tankers of oil are sold on average six times as the tankers cross the ocean. Its just a game to manipulate the price.
I read a post further down that said something to the effect of Saudi Arabia can not play this game for long at this price. But, how do you know how much the US gives KSA? For the invasion of Iraq the treasury printed $20 billion in cash and shipped it shrink wrapped on pallets. The US can electronically deposit an endless amount of money into KSA account at the NY Fed. SA will not lose a penny.
A decrease in selling price can last for a while, but at some point the other producers will stop cooperating as they need the revenue too badly to support their growing populations who are themselves energy hungry. At the point that these other producers stop cooperating with lower prices, Saudi Arabia better be ready to increase production. If they can't (and they won't be able to enough to impact the global market) then it's game over for them and the US, regardless how much SA is being compensated. Countries need oil, and lots of it, even in a depression. If they can't get it cheaply from the Saudis, they will turn to the more expensive producers. Bottom line - oil is a limited commodity and vital to any economy, in depression or not.
KSA is no longer the dominant producer they once were. The West has made sure there are many additional sources around the globe for supply, which can be bought off. The majors get huge tax breaks to ensure big profits. The smaller companies lay off some folks, but hey this is economic warfare and they are collateral damage. Can't have a war without collateral damage, right.
If the US is trying to decrease Russia's petro revenues by lowering the price in the paper market the lower price fuels China's economy. So, maybe keeping China running a little longer is the goal. In addition, if the US economy is stalling lower energy prices would help phoney up the numbers for the holiday shopping season.
The price swings up and down make sense only to those who are trying to create the reality which they believe gives them an advantage. In the end, its just the game of empire.
"Countries need oil, and lots of it, even in a depression. "
Countries in a depression need cheap oil, ergo you lower the price to fuel the economy.
You think the ruble hasn't been tanked by outside forces? Seriously? C'mon... That play ran it if gas, so now they are trying the Saudi angle. But, it will backfire and hard over a 2 year period for the exact reason you said. Wall Street's Shale Ponzi will be exposed and that is going to get super ugly. If WS doesn't tank the USD, we ate going to witness a supernova.
Oil is matching the RUB-USD performance exactly.
The RUB is pegged to the price of exports, the largest of which is oil.
Given the fact that the world economy is soft, and demand is declining, it is much easier for the Saudis to force lower prices. They would not have to increase production a lot to get the desired effect. If world demand was growing then I agree that Saudi Arabia would not be able to force such a price cut.
Now wait a minute, I thought only gold & silver were "manipulated". I mean, Jim Sinclair and King World News said so.
Pretty sure I said on these pages as soon as oil started going down despite Ukraine tensions that manipulated oil prices were being used for policy objectives. And it will come back to haunt us, undermining domestic production and drilling and making us Saudi Arabia's biyatch as soon as our production falls off (given the 30% plus depletion rates). F'in priceless.
Here's how we end the Fed's games forever:
The Fed and its owners have squeezed the real economy for years, giving free profits on excess reserves while abusing their position within the market structure via asymmetric leverage, knowledge and acccess to generate synthetic finance profits to feed themselves. Now, it is time to starve them...
Convert a minimum of 5% of what you sell into physical cash and keep it outside the banking system, another 35 to cash to FDIC limits (then split evenly between gold and ST treasuries), 30% to ST treasuries and 30% to physical gold. Time for some real dynamic tension.
Saudis know what's coming if they don't play ball with USA, and they are in a position (short tem at least) to weather the storm and crush competitors. Financial warfare is the new warfare and Iran and Russia are gonna have some sore balls. China keeps its distance and gets cheap oil, american consumers catch a break (nearing a 2 handle in sunny Florida), and Russia becomes more isolated. China will not intervene in a US/Russia proxy war. Who has the answer to the Iraqi oil and how it fits in to the equation? I realize it's much more complicated and don't believe .gov understands the repurcussions, but If this was not good for the bankers, then it would not be happening.
Wow, this guy is a genius...
The decline in oil and gas consumpition has been there for quite some time. This is not strategy.
The US and the Saudis tried to eliminate the competition (creating a mess in the suppliers less friendly) to keep prices up. The real deal is that the US could supply weapons and use them (its most profiting industry) protecting its oil interests and Saudis', while the Saudis could benefit from being able to see the contraction in the quota of other suppliers, stabilizing more or less the oil price. Now do not forget that we live in the PETRO-DOLLAR Era (not for long evidently). They did really anything they could, destabilizing countries, letting people get killed by the thousands, all in the afford to try to keep prices up.
Demand has been declining for many different reasons among the others, despite the advertized "all is good" the real economy has been contracting at an unprecedent rate.
Now somebody tells you that the drop in price is a strategy? You are fools!!!
These guys are loosing control and now they try to make you think they are still leading the game. As a matter of fact they are not (despite the remarkable effort, I mean we are talking about lots of human lives that were sacrified for this cause...).
Nope, things are really getting out of hands. In a very short time not even appearences will hold up anymore... the situation is bad for everyone. The soon we realize that we have very big problems and the sooner we try to put aside greed and very small partisan interests working together the more will be able to minimize damages at a global level.
Oh shit I forgot, the greedy partisans that tried to save a couple of big corpotrations at the expenses of thousands of lives, are the ones that are pulling the strings and they might not be able to put aside greed, and might not even be able to cooperate with anyone else on the planet.
Well I guess that we are fucked... as a humanity...
Counting the days to armageddon now.
On the other end... a miracle might happen... I believe in miracles.
;-)
IKR. Like the US knows what the fuk is going on besides its going down the toilet. Its just all a big shit fight out there. People are writing articles like they know. They dont. Its just so complex that articles like this are just silly guessing
The Gulf states will be less affected by the price drop, he added. ...
Bull fucking shit you say! Where is the pipeline to Europe and Asia that's going to make that $50.00 - $100.00 a barrel work for them?... Oh I forgot that's what Syria is all about!!!
The death roles of a once mighty oil empire that is putting all of it's "eggs in one basket"!...
Time is not on their side(s) and holding the price down will only hurt them more than it will Iran and Russia... If Saudi Arabia and the U.S. plan to capitalize on this one they better start WWIII very soon.
The only money that matters is going East and the tent dwellers are about to learn a very hard lesson of what "holding your breath" for too long does when you are old money competing against the new kid on the block!
Price Manipulation is a 2 way street
Oh Vlad, pleeeeeze make a personal appearance on ZH so we can all suck your dick, but not in a gay way, no certainly not, but more like in a way where we can all be hetero men and yet still suck your dick, maybe while brandishing guns and other manly instruments which will prove our non-gayness but yet still allow us to suck your dick.
Hay man, since you are into sucking cock, Lindsey Graham, obola, and nancy "the San Francisco fucking treat" wants you to drain your missle of its fuel.
Here's how this could end.
Last year, driving down the price of oil in dollars meant crisis for almost all the countries that produce it. (Or are having it sucked out of them.)
This year, oil producers will have a choice: sell the oil for not enough dollars to get by on, or sell it for enough Rinbani to get by on a lot better.
That's why this Chinese and Russian funded escape is such an irresponsible attack on the stability of the entire world system, and must be stopped by any means necessary!
If only all those sheeple would cooperate better and stop being so stupid and gumming up the works!
(If you're nodding your head in agreement, take a step back and refocus. It's us that they're talking about!)
The Renminbi is pegged to the dollar.... And if you (or others that have mentioned it) think differnt currency sales somehow change the value of the oil being sold, or increase it's cost, or somehow change the game for Russia et al, please tell me you don't work in finance....
I don't know who started that line of thinking but he (she) is an idiot feeding on other idiots.
Invalid wrote- "The Renminbi is pegged to the dollar.... please tell me you don't work in finance."
Newsflash- the peg went away in July of 2005. The Yuan is in a managed floating exchange.
The exchange rate is based on a basket of foreign currencies; not the dollar alone. The largest portions in currency basket are held by the (US) Dollar, the Euro, the Yen, and the Won. Smaller portions in the basket are made up of the British pound, Thai baht, Russian ruble, Australian dollar, Canadian dollar and Singapore dollar.
The central Bank of China publishes a central parity, and the daily trading price of the U.S. dollar against the Renminbi in the inter-bank foreign exchange market is allowed to float within a band of 2%.
Hell man, in the offshore yuan market in Hong Kong, the Chinese currency floats freely!
http://online.wsj.com/news/articles/SB1000142405270230402630457945015296...
Lol... "Please tell me you don't work in finance"
Now that cheap oil is back, I can rekindle my cocaine and hooker habits. Thanks Saudi Arabia!
Fuck the House of Saud!
Nemo,
This is WWIII, and the weapons and goons to protect Saudi lunch money are already in place.
And agian, the effect of Iraqi oil is not insignificant. Who owns Saudi oil? Who owns Iraq's oil?
Q.... who built the largest embassy on the planet in IRAQ? Why? To own Iraq? Think bigger.
For all the reasons stated by Tyler, obviously the Saudis (along with the USA) have an incentive to hurt Putin but IMO they also want to end the low-margin shale oil play globally as well. They can therefore essentially knock down two birds with one stone as long as they don't have to hold the prioce down too long to the point of shitting all over themselves.
My context comes from having been been an exploration geologist in the oil industry since 1982. Because I'm an old fart, this is my second time around with a shale oil boom. In the early 80's, when I got hired into a Supermajor, oil had risen to $30/ barrel and the projections were that oil would be $100/ barrel by the end of the 80's. As a result the Supermajors were starting to move aggressively into low margin, high-cost oil shale, tar sand, and heavy oil plays. They were also hiring any geoscientist and engineer from a decent university who could walk and chew gum to rapidly staff up. Hell, I wasn't a rocket scientist and I went to five paid-for interviews in early 1982 with five Supermajors and received five job offers. For one of the interviews, I was so hungover from partying the night before that I forgot my luggage for the plane trip and showed up in faded jeans and a torn T-shirt smelling like stale beer and vomit, and and I still got a job offer. Those were the good old days, somewhat like the oil patch has been with this shale oil boom during the last few years.
Anyway, like all good things the shale oil party of the early 80's came to an abrupt end when the Saudis decided enough is enough and in 1986 they cratered the price of oil down below $10 barrel long enough for the shale oil party to end catastrophically. At the beginning of 1986, there were ten geoscientists in the exploration team I was on, and by the end of the year six of them were shown the door. In retrospect, as with today, I also wonder if Ronnie Raygun and his advisors were also trying to hurt the USSR and worked out a deal with the Saudis, given that the USSR was one of top oil producers/ exporters at the time.
Oh well.... It looks like another shale oil boom is about to bite the big one. All of those young, well-paid, ambitious geologists and engineers in the oil patch had better get their CV's tarted up. Sorry for the very long and rambling, old fart navel-gazing.
Boogity, thanks for this old farting. Interesting stuff. Cheap oil was one of the tools used to bring down the USSR and it seems it is used again for the same purpose with now Russia.
I sometimes wonder what would happen to the geopolitics of the world when somebody discovers something that was overlooked by everybody and which would allow people to heat their homes and run their cars independently, cheaply and eternally just using common day materials. Let's say you could make your car run on your morning pee or whatever. All these geopolitical games would dissapear in front of our eyes (to be replaced with something new I guess). The world needs an energy revolution. In order to save the environment we need to move away from fossil fuels. We also need to move away from centralized energy provision and people should become energy independent and even providers of energy. What the microcomputer did for computing, distributed energy generation should do the same for energy production and provisioning.
Thats why neither Russia, nor England, nor France, nor the US like the Germans. Its all about applied technology. Germany does not have substantial natural resources of its own and colonized only a few small, scattered territories for appx 20 years till the beginning of WWI. Thus the economic development in Germany is since ever depending on technological developments. But these developments do often greatly disturb the balance of power.
Here one actual example. Desertec. But that is now not possible to implement due to the resistance of the "joint controllers of the natural resources of the world". Libya in cooperation with Germany and Italy would have pulled this off alone. But now North Africa and the whole Sahara reguion is liutterally "burned", thus it is stopped for a long time. Maybe this was also a reason why Russia did not help Gadaffi by deploying a state of the art air defence prior to the attack of US/UK/France. Germany stayed completely away as well as Italy but that did not matter.
http://en.wikipedia.org/wiki/Desertec
Here Nitrogen fertilizer. In 1914 its big style production development triggered in my opinion WWI by breaking the UK/US monopol on salpeter needed as fertilizer and as gunpowder. At the same time it would have made Germany a leading food exporter based on its huge East German farmlands (now part of Poland, Russia, Ukraine. Compare this with the situation that Germany was the biggest food importer in 1914,
Not to mention the Austrian/Hungarian farmlands. A real, very strategic asset very well comparable to oil and gas.
The Haber process now produces 500 million short tons (454 million tonnes) of nitrogen fertilizer per year, mostly in the form of anhydrous ammonia, ammonium nitrate, and urea. 3–5% of the world's natural gas production is consumed in the Haber process (~1–2% of the world's annual energy supply).[15][16][17][18] In combination with pesticides, these fertilizers have quadrupled the productivity of agricultural land:
Due to its dramatic impact on the human ability to grow food, the Haber process served as the "detonator of the population explosion", enabling the global population to increase from 1.6 billion in 1900 to today's 7 billion.[20] According to Howarth (2008), nearly 80% of the nitrogen found in human tissues originated from the Haber-Bosch process.[21
Cheap oil can do a variety of things.
It can put pressure on an adversarial country, rich in that resource, but that also puts pressure on allied countries, who are rich in the resource too.
The major effect of cheap oil is a surge in the economic growth of a country which is a major consumer of oil.
Given that the thoughtless Republicans and Ronnie Reagan were running the show in Washington, wasn't cheap oil concomitant with Grover Norquist's expanding budget deficit and Arthur Laffer's supply side claptrap?
Russia is much more dependent on oil revenue than the Soviet Union ever was, and I believe the oil weapon only worked because the SU was rottting from within. Another story. But still, Russia won't easily be broken, because China can't let that happen.
<balance of comment moved by author>
thanks for the great insight Boogity, enjoyable vignette in your life as well- loved the funny story about you getting that job.
saw this in WSJ the other day, discussing similar:
http://www.marketwatch.com/story/can-saudis-beat-north-dakota-in-an-oil-...
Just playing devil's advocate, old pal.
How accurate is this statement?
There was no shale oil party going on in the early 80's. In the Bakken Formation in the 80's they were getting less than 50 bbls of oil a day per well. And in 1988 only 100 wells were producing.
I doubt that the Saudis cratered the price of oil because 100 wells in the Bakken were producing 50 barrels a day.
https://www.dmr.nd.gov/oilgas/stats/historicalbakkenoilstats.pdf
The price of oil cratered because there was a huge manipulation in the oil market and someone made a lot of money and someone lost it.
In 1986, horizontal drilling, which is used to recover shale oil, was just being developed and the cost of retorting oil shale was so prohibitive it wasn't taken seriously.
That's all. You may resume being an old fart.
I know an environmental engineer that talked about drilling oil in eastern Ohio in the 1980's.
Yabba dabba doo!
BULLSHIT they have no controll, if ebola takes off they will have less... less air transport, less corporate energy, less consumers in day to day
.
oil $40-60 for 20 years if ebola goes to shit
You guys are obviously new to the markets..............
Oil can drop to 40 buks and everybody still makes money....
Oil is the most increadible resource with the worlds best tax regiment...........
35 buks might make a few go bankrupt, but somebody will take over and the old sock holders/ bondholders will loose their investment but the world will keep turning and the oil will just get cheaper.
Everybody here is in the world of no bankruptcy central bank world..............
Energy companies go thru boom and bust forever.............
In the good ole days... an oil company a day went bankrupt.....
Now we freak out if one looses money?????????????????
But
Not as much.
When it comes to making money, more is still better than less.
Only for the older fields can you maintina such a low price. For the newer fields the price is much higher because production costs are much higher. You can't sell at $40 when it costs an average of $85 to produce. Look at the breakeven point graph. I trust it more than you. And an added factor which is not taken into consideration is that low prices can not be maintianed for a long time as the oil-producers in the ME have growing populations hungry for energy themselves. So the pressure to use more of the oil for themselves is high and reduces considerably the amount available for export. And also, as global demand is down anyway because of the depression, it is more difficult to maintain a price war - if I don't need the oil, I am not going to buy at any price, am I?
Saudi Arabia can keep this up for a while, but not too long.
More importantly, the oil producing countries, especially Saudi Arabia, have grown dependent on oil revenues. Lowering the price that much will have a drastic effect on their budgets and social programs. As such, I agree that they will not maintain this for very long. As soon as the Saudis get what they want from the USA, they will raise prices again.
Only for the older fields can you maintina such a low price. For the newer fields the price is much higher because production costs are much higher. You can't sell at $40 when it costs an average of $85 to produce. Look at the breakeven point graph. I trust it more than you. And an added factor which is not taken into consideration is that low prices can not be maintianed for a long time as the oil-producers in the ME have growing populations hungry for energy themselves. So the pressure to use more of the oil for themselves is high and reduces considerably the amount available for export. And also, as global demand is down anyway because of the depression, it is more difficult to maintain a price war - if I don't need the oil, I am not going to buy at any price, am I?
Saudi Arabia can keep this up for a while, but not too long.
True. It only costs two dollars to pump a barrel of oil from the ground.
The rest is taxes and profit and executive salaries.
Nigeria apparently needs to export ebola instead of crude...
Nice picture. An F'n drug dealer and one of the guys that took down the world trade centers.
A small historical note that I haven't seen mentioned...
http://en.wikipedia.org/wiki/Siberian_pipeline_sabotage
If this is true (doubts have arised over the years), but after Stuxnet, I'm leaning more towards the CIA's side of the story. In which case, turnabout/payback is long overdue by the Russians, and what better target than Saudi Arabia.
A weaponized version of Thalassolituus oleivorans?
That's the oldest trick in the book.
Wait until your adversary has bad luck, then claim credit for it.
Increasing production from the U.S. and global economic slowdown more easily explain the lower oil price. But interesting theory.
Can't understand why the Ruskies don't covertly put a mini-nuke in the Saudi oil reserves.
Nuclear fracking might be highly effective.
Economicaly, it might be like Russia shooting itself in the foot.
This is a little off topic and a little bit on.
Here's what RIANovisti is reporting on Staurday;
At least that's what Russia's Finance Minister Anton Siluanov said.
http://en.ria.ru/politics/20141011/193937840/G20-Finance-Chiefs-Consider...
The global economy looked terrible before Nuland/Obama put sanctions on Russia. Russia's food embargo obviously exacerbated things; hurled them headlong into a triple dip recession.
I have no idea whether Siluanov will prove to be right. But he certainly is much more believable than many of the anti-Russia posters here.
Also I don't know if this has anything to do with Frans Timmermans' revelation yesterday that one of the crash victims was wearing an oxygen mask.
If he can contradict the report about the mask and the instant deaths of the passengers, perhaps we will soon hear that some of those high velocity projectiles were, in fact, cannon fire. Who can say?
But if this speculation is true, what a lovely belated birthday present for Mr. P.
And a total verification of why Putin was proclaimed the "Most Powerful Man in the World for 2013".
As far as the secret deal between the US and Saudi Arabia, I have two points.
There are many who say that the Saudi's Ghawar oil fields are in decline. As are several other jumbo oil reserves.
http://www.egoproject.nl/updaet%2013.4.htm
The Saudis are a Semitic people. It strains credulity to think they would cut prices of a product they were running out of.
Europe is celebrating it's plunge into a triple dip recession. The US government says that we had a double dip recession but that we have been out of it for a while.
I don't think we were ever out of it.
The point is demand is dead and Rashid Abanmy,President of the Riyadh-based Saudi Arabia Oil Policies and Strategic Expectations Center would be last person alive to say so.
When demand for what you're selling dries up, you don't say there is a demand problem.
YOU BLAME IT ON A HARSH WINTER
running down.
SHHHHhhhhhhhush!!
You can't call anyone but Jews, Semites.
In their arrogance, overweening pride, and megalomania, they hijacked the word as applying only to themselves.
This does not make any sense. Saudis also need $93 oil for breakeven budget.
Oil majors will stop all investment if price goes lower. Fracking firms will go out of business.
I have serious doubts that this price cut will go-ahead.
Not only that, but the US's highly touted fracking resources require a higher price to make them viable. Who's punishing who here?
No one comes back from war without a mark
Vineyard of the Saker has 2 videos of Givi, a Novorussian field commander... Watch the second one. The West doesn't have a chance.
follow thru on YouTube from those
You will see Female fighters among
Givi's and Motorola's units tasked with Donetsk Airport cleanings
The real interesting part is at around the ten minute mark when Givi asks the UA guy on the phone who is shooting at his troops. 'Poles? Germans? French?' WWIII may be closer than the brainwashed idiots know.
https://www.youtube.com/watch?v=xP_ozv0qgXU&src_vid=K9k05CbXmqE&feature=...
Surely this would be a great oppertunity for Russia, China to dump 'ALL' their USD$$$$ on to the Saudis for cheap oil and keep their own oil in the ground. "BINGO"
50% of Russia's federal budget depends on oil... so, they could "keep their own oil in the ground", but they simply can't run their country the way they are now. At. All. Nada.
China already has "cheap" oil... it comes frm Russia.
Yeah, there's always a "rub" in getting rid of US dollars... it means you have to buy US goods, ultimately.
What do you mean they have to buy US goods? What goods?
Russian Federation is buying Gold
THIS is why I come to zerohedge. Fascinating subject. Keep them coming.
Then why doesn't Putin react and try to bankrupt the US, why is he waiting?
Because waiting is the best way to accomplish that. The US (among other nations) is bankrupting itself.
That chart has oil based on the petro dollar. The break even price is in petro dollars. Fully 1/3 of the countries listed on that chart would ditch the petro dollar if given half a chance with an alternative.
Is there not a rumored alternative in the works? Is not gold reserves amassing in the east a potential game changer? Would the BRICS not embrace an alternative to the oil backed dollar immediately given half a chance?
This is certainly a chess game that is not going well for the aging master. And that my friends underlies the brutality, death and chaos presently afoot in the world at the hands of the embattled power brokers.
Putin is not Kruschev, an old drunk. THe movie Red October could have had a very different ending. Russia is not Viet Nam. These fools better be careful. Putin is a professional intelligence officer. He has faced death before, has no real family, and is probably not afraid to die. Obama is worried about the fund raising for his library and Kerry is worried about his wife's billions that he intends to spend in retirement. Be careful what you wish for, gentleman.
I have a theory of the grand strategy based on 1/10 of availible information based on 30 articles by people who have theories on the grand strategy based on 1/10 of availible information that they have gleaned from academics who tell the Govt. what's going on with 1/10 of availible information because the people who have the rest of the information ain't sharing it with anyone at all.
Wanna hear it?
With much anticipation.
80's thinking. The Saudi's aren't even in the game anymore.
Sub $3 gasoline will distract the starving masses for about 10 minutes.
Then what?
The definition of the evildoer,the House of Saud
you insult the arab when you call the chimp pimp apes of the house of saud arabs.
the house of saud is a tavistock project before that they where jews.
along with israel the saudii did 911 these simians are talmudic satanists.
please god make they rot in hell.
http://m.strategic-culture.org/news/2011/10/26/the-doenmeh-the-middle-ea...
Fuck saudi, demand is down. Let them eat camel assholes for another 1000 years.
And for the other spin off....I think I will hold off buying my long awaited pallet of solar panels, charge controller, batteries and inverter. Seems like other energy alternatives will be taking a short term hit in price. May be cheaper to wait?
mid term elections coming up. How do you say lurch in arabic?
And it makes sense for Putin and Iran to covertly purchase Saudi oil and store it or flip it. Duh.
Another nice chart
http://www.eia.gov/todayinenergy/detail.cfm?id=18351
Those pesky frackers have ruined so many dreams:
of global ccoling, electric vehicles, windmill fortunes, home solar companies, company solar companies, national solar companies,
the carbon foot print schemes, the aid to polar bears scheme,
How much can i get if i sell a carbon credit. The carbon credit trading on the stock exchange
An intrnational market the way to bring wealth to the 3rd world Carbon Credits of course
If you could just figger out how all the tax benefits get distributed
Then insert yourself into the money flow -- why you would be an entreprenure
And you could pay off your debt
What will I report below seems to have nothing to do with the Post.
Has much to do, it is not an off-topic, notice geopolitical implications.
In 1981 my platoon was trained in guerrilla tactics, my sergeant was trained in the USA, the President of Brazil was General Figueiredo.
Ronald Regan wanted Brazilian troops in Vietnam as UN officials, Figueiredo said no.
I had between 18 and 19 years old and I thank God for not going that shit but received training, a lot of vaccines etc. .
My father was a Vigilance Inspector Oil Refinery in Cubatao-SP - one refinery in France which was dismantled piece by piece and brought to Brazil after IIWW - I read the safety manuals as a kid.
My father worked in this refinery for 11 years, entered in 1958 came out in 1969 - the records contained 1971, he spent two more years in the Union.
My father died in July 2012.
In some commented made ??with my sergeant could explode like an oil refinery, the guy was enthusiastic.
Did not know what was a cracking tower, did not know the implications of gases that can kill whoever attacks, did not know the security protocols anyway, the guy knew just bombard with mortar, united order to shoot with rifle - FAL - we dubbed "Automatic Rifle Nerd". Kkkkkk! - Oddly enough, I'd rather shoot with the FAL and carrying all that weight to carry an M16, the FAL is more reliable, has incredible precision, in 600 meters could group three projectiles at twenty in a circle of 30 cm in free throw without burst.
Between 15 and 18 projectiles on target acertava who had standard measures 1.5 meters by 2.50 meters.
For a recruit is a good start KKKKK.
Let's go back to oil.
You need three guys to fuck an Oil Refinery.
If there are ten refineries, you need thirty guys.
With thirty guys you increase the price of oil in the international market.
ISIS does not, the USA never bombard oil refineries.
Why?
You just need a rag and a match to blow up a gas station, someone else does it?
No!
Why?
Need!
But I read somewhere that the Russians have forecast that oil prices drop to $ 60.
They will bear six months to a year to that price.
The guys have word but I do not believe that other major producers hold out so long.
The risk of you seeing some "thirty guys" exploding refineries is very large.
Troll before some idiot paid well to challenge comments appear feasible, repeat:
Not istórias invention, all I say is that I spent about situations throughout life, are stories, real and tangible thing.
I quote dates and places, something that anyone can confirm - I did until surgery on his right shoulder in February 2013.
Kkkkkkkkkkkkk!
:-)
When people know you have an appointment with death seeks to tell as much as possible of what happened in life.
hehe.
There isn't any "secret deal". The world economies are standing still or worse. You can't have it both ways unless you are a ZH'er.
Another thing about Russian oil & gas
They drill where there is not supposed to be oil. They drill where fossil fuel shouldnt be.
And they find oil -- read The Deep Hot Biosphere
And why doesnt France Frack for oil?
Because the government owns the mineral rights
In the USA the farmer own the mineral rights and by golly he will sell his mineral rights to Apache Oil because Apache knows how to get the gas out of th ground
So all of you woried about fracking running into the brick wall of truth that there is peak oil and that there is a limit. The surface has not been scratched.
Fracking merely changes the shape of the production curve, it does not liberate additional oil from the ground. All it does is make it flow faster initially, but then very quickly it crashes. This suits western capital markets well, as all they're interested in is the 2 year "profit" time frame until the next ponzi scheme can be manufactured, to hell with the future. The cost and embedded energy required to frack oil out of the ground now iss almost prohibitive and is a symptom of the curent reality of Peak Oil.
Those wells wouldn't be productive without the horizontal aspect. That's why the Mississippian play has been able to rework decades old defunct drilling of the verticle type for the horizontal type.
No, the price of oil, like everything else, is getting slammed to support the failing dollar. The Saudis are in the process of signing off from the petrodollar, while the banksters are busy stealing their bullion. The sh*t is hitting the fan, stand back!
"DC went to the Saudi's, Iraqi's, Kuwaitis and told them that they are not sure if the US will be able to help defend/defeat ISIS because the price of fuel is very high. Presto-chango, lower oil prices.
Not to mention the resulting disappointment in Russia."
Another reason oil is plunging:
Cold fusion reactor verified by third-party researchers, seems to have 1 million times the energy density of gasoline
http://www.extremetech.com/extreme/191754-cold-fusion-reactor-verified-b...
http://www.sifferkoll.se/sifferkoll/wp-content/uploads/2014/10/LuganoRep...
At this time of the year a lot of projects report progress. Don't you know why?
Funding.
Comment on truth being the enemy of the best laid plans o men
Its probably truth that caused WW1 WW2
and although that was bad it may hav been better than the alterntive which we will never know
agreed that truth is supresed more today than yesterday
and the re emergence of truth can be catacysmic (sp)
Its very true that lower prices drive out high cost producers, and that lowering of prices may be nothing more than a competive stratagy. But as often is the case the lower prices take on a life of their own --- unintendended consequences?
Call it what you will one man's consequences is another man's bounty.
But to think that it's all part of a master plan created by a great central planner (here on earth not spiritual) gives way to much credit to man and disagrees with evidence of world history.
For example Russian & German socialism was supposed to be the ultimate solution. even though Nazism & Comunism were bitter enemies, except when it came to Poland
Always the present planners think the past planners were not as intelligent or creative or able to implement plans as well as the present planners. But the present planners will be viewed by future planners as incompetent when the new plan is hatched.
Banksters may think they have the answers but but but the truth may come smashing down
Lets all sing the war song.
WAR
WAR
WAR
WAR
WAR
repeat :)
@ BouncyTheWonderbunni:
If I were you, or teclaria never say that.
War is an insane thing, no one deserves.
When you kill the first guy, you go crazy, literally freaked out, you do not sleep, you lose the hunger, you do not stop thinking about the guy you gave the unfortunate shot.
You see the guy in your handle and live mass of sights and then see the shit he did because he needs a report that Lieutenant or sergeant does.
Fully understand the dynamics of the guys who kill themselves when they come back, myself, much less for one 9mm cocked and touched in the head several times.
My first shooting was in the bush against guys that exploited gold irregularly within a State Park, was the night.
Not good review details that might compromise my life but what I wrote above is real.
This first melee was fatal, had two more in Jureia and six or seven in Ubatuba, two in Cubatao.
I was an employee of the State therefore able to act - even with my miliary training in the Army.
After some time and five or six run-ins, you seek help because his head is exploding.
I took a shot in the belly in a robbery attempt, I was unarmed, coming back from the beach in Guaruja.
I fell out of my service, called me mad because retirement was secure, I told them "fuck."
In my case, I did not ask for help, I fell out of the loop, I moved to another city, changed my state, I changed my profession.
Woman had already changed a few months before kkkkkkkkkkkkk!
I did not care more for my old friends, made ??new.
With the physical preparation that had assembled a company of service, cleaned water tanks, cesspools, settled computers, repairing pipelines etc. .
What can you imagine broken into a house or apartment I know fix.
After that I had at the time the degree of Professor of Geography Army, spent two tenders, teaching at Federal University and State University and four and a half years in paricular school - that paid better, much better kkkkkkkk.
I'll stop counting my life here, these last twelve years are restricted.
The head of a guy who has been active and participated in run-ins is distinct from caraque trains are shot on weekends.
Discipline is another.
@ BouncyTheWonderbunni:
Think carefully whether it is worth face a bar that.
A song for you, is my gun, I'm "Black Foot", Infantry:
http://www.youtube.com/watch?v=-IWYO23B5y8
:-)
You wrote timecube didn't you?
The American Empire will not decline as Portugal, Spain, France and England.
The American Empire will fall as Sparta, Israel, Rome or Germany and Japan recently.
Three historical options.
The first is to make a war and lose, have fully occupied the territory.
May believe that this is what will happen if America meddle the beast and cause a third world war just with missiles.
Many unemployed in Europe are taking their time in reading about sacanagens American Government around the world.
In this case there will not be one stone upon another, and what is left will have a strange glow in the evening.
The second option is what happened in Israel in 70 years after Christ. An internal split, an invasion and diaspora.
In this case you pulverize Americans around the world, it would be a worse plague than Ebola.
No government likes guys who have their own opinion, are armed and preach freedom humanitarian bombings.
People who behaves like a rain of locusts in a cornfield.
hehe.
The third option is similar to the second, held in Rome when Emperor CalígOlabama set fire to Rome after his election as Senator donkey and lead a bimbada him - the donkey.
In this option the plague does not dilute the rest of the planet, would be contained and its fragmented territory.
Oh, forgot to say what would happen to the Capital of Usa, Tel Aviv.
Nothing that a single Chinese submarine give way, is a small territory.
hehe.
"The American Empire will fall..."
Perhaps, but not in your lifetime. Definitely not this century.
People have been making that prediction for decades, but America keeps pulling further ahead.
Boy I sure enjoy some of the comments on here. Too funny!!!!
Conspiracy around oil??? Like that is new? Aren't these the same assholes that park their ships offshore waiting to dump their load on the markets when the time is right so that they can max out profits or fuck some poor hapless sap out of the money he was hoping to take his wife out to dinner with. Yep...I think these people are part of that crowd???
Maybe, just maybe, this little stint will backfire on them? Could you see Iran, Russia, China and maybe Venezuala starting their own Petro Dollar. Maybe Russia says to Iran. "You see that Dick Kerry, he thinks he's got us over a barrel", maybe we should jack the shit out of gas prices on the overly dependent Europeans and do deals with oil in Dinars? Or Chinese Yuan. Maybe even backed by gold? Whooo wee?
These imbeciles are playing with fire here and someone is going to get burned bad. Likely the assholes who started the whole thing. Excpet we'll all pay for their bullshit.
That a guy like Kerry is leading the US into battle scares the shit out of me.
@ MarcusAurelius:
I liked "boy", I love when someone thinks I'm younger! Kkkkkk.
Returning to the subject, yes.
Everything is about oil and distribution.
You can blow up a pipeline and the next day it will be functional, it is a matter of hours to fix.
Exploding an oil refinery is something else, requires knowledge - unless you want to be a suicide bomber kkkkkkkkkkkkkk.
Still not consegurá fuck up.
All oil refineries have a Achilles heel, buried.
Formerly it was visible, until it was painted like a soccer ball, round, beautiful and cold.
Refinery where my father worked we had a lot of respect and fear for that ball, it could detonate the Serra do Mar that was close, 200 meters and bury that whole bagasse.
Same thing with the gas station, if you find where the pipes are venting of the tanks - which usually has 1.5 "- you with a cloth soaked in gasoline and a box of matches has everything to shit.
Ideally, use three grenades, smoke-producing may be, need not be fatal, what matters is fire.
For my part, I prefer the good old cloth.
I was trained for this and do not consider it a joke.
Now, after almost old and going to shit I talk, not my children know 20% of what their father did in life kkkkkkkkkkkkkkk.
Marcus Aurelius bration there.
Alexandre.
475, First Platoon, Second Company, Second Battalion of Hunters, Driver and Snyper.
:-)
@ MarcusAurelius:
It is not a matter of "if" or "when".
Brazil, Russia, India, China and South Africa already has a bank where there is exchange of currencies mano a mano.
When you read in the media "Brazil ran a deficit, Russia had défcit, China or India had deficit ..."
The following happens, they count only transasções dollar in SWIFT.
The guys do not have to account for both soybeans that Brazil sent to China and imported into commodities.
Nothing doing in domestic currency is accounted for in these statistics.
Brazil is exporting meat to outrage in Russia, nothing is done in U.S. dollars.
Russia is close to finish payment on its international loans, Brazil has already done this and still stuck a lot of money in the IMF ass.
I even had a few dollars saved, donated to my son who will marry Dec. 5 that he spent on the trip with his wife.
The more dollars out of here the better.
Maximum dollars in two years will be shaped confetti chopped and used in the carnival of Rio de Janeiro.
Idiots printed too much paper is not how economics works.
The Gold standard again, believe me.
:-)
Russia has too much oil
.
we need a lower price bitchez
Tesla vehicles.
Aircraft F-35 and V-22 Osprey.
Obamacare.
Ebola.
Ukraine / Lebanon / Syria.
Fracking.
LCS-2.
Items fucked up the USA financially and ethically.
Were unfulfilled promises, agreements were broken, many people died.
Here fifty years historians will be panning in the comments Network.
Probably they know separate Trolls of serious people.
Hopefully the Karaio is quoted in an article Kkkkkkkkkkkkkkkkkkkk!
hehe.
Tesla was unfullfilled promises? Broken agreements; people dying??? Where do you get that? Tesla is one of the few shining examples of success in America today, one of hte only good things government handouts have spurred. Is it that you lament the big government hand Tesla recieves? On the flip side, do you realize how much advantage the oil industry gets from government?
A tax break means that those taxed keep more of their Earned income.
A tax subsidy means somone is given the money that others earned and was taken at the end of a gov't gun barrel. That's the difference between the oil industry versus Tesla.
Tesla provides the very affluent with a feel good "eco friendly" great automobile (company) that wouldn't have made to the first model were it not for the taxed people who for the most part cannot afford a Tesla even with the 7 to 10 thousand dollars per vehicle in tax payer subsidies.
Those whom the Gods want to destroy, they first make mad.These Saudi cretins now imagine that they are some sort of global omnipotent force courtesy of US 'support'? They are playing with fire. First, the Russians could simply demand that the Europeans pay for Russian gas in Roubles, damping down the dollar. At the same time, 90% of Saudi oil comes from the Shiite majority Eastern province and who are treated like second class citizens by the ruling clowns in Riyadh. It will not take much for Iran in collaboration with the Russian intelligence services to instigate insurrection and rebellion in that region, destabilising the whole gulf and driving oil prices to 200$ a barrel. The ice on the cake would be sinking a huge oil tanker in the straits of hormuz.
The idiots who come up with these hairbrained schemes never really think of the possible blowback; they are too busy with trying to save a doomed unipolar world against a tide of global rejection with hubris filled sandbags.
Well said.
That's an awesome discovery and one i've been watching. Fucking suck it big oil!!!!!!!!!!!!!!!!!!!!!!!!!!!!
What does Saudi Arabia get? They get to keep their heads! No ISIS will be unleashed on the Kingdom. They don't play our tune, then heads will roll.
Have you guys seen the following? Very good, imho:
The Covert Origins of ISIS The Geopolitics of World War IIISCG is like what VICE was supposed to be before VICE sold out to the spooks [their coverage of Libya and Ukraine was incredibly biased, but lacked subtlety, which apparently is not needed anymore when being a faix gonzo reporting outfit. Basically ditto for the young turks - which are about as iconoclastic as the daily show, but less funny]
Gotta love Krauthammer, the Israel Firster neocon, still trying to convince everyone, without evidence, that Iran is working on a nuclear weapon, just 12 years after he helped ie the US into the Iraq war - manifestly for the perceived benefit of Israel, in his view.
1) Secrets are repugnant in a free society.
2) With #1 and a buck you can get a crosstown bus.
'IS that all there IS, too is... is, a Shell Game?'
A shale game that IS!?!
An estimated 37 billion tons of shale-oil (*stone?) in Aleppo (Khanasser), Syria. Note: converted into Bbl's =~ 296 Billion Bbl's of oil Stone, or,... 37 billion X 53 gal. (42.2 gal /bbl)? BUTT, according to geologist, the maximum extraction of oil from a tonne of shale-oil stone is equivalent to ~53 Gal ~ 200 ltr.. If true,... in the border quadrant of Turkish/ Syrian border?
By comparison Iraq's oil resrves revised in 2013 were only ~ 141 billion bbl's.
Location, Location, Location... with plenty of fine sand and water in a fault-free zone?
Where's Haliburton?
http://www.syria-oil.com/en/?p=827
http://en.wikipedia.org/wiki/Oil_shale_in_Jordan
http://geology.com/usgs/oil-shale/
Ps. This could be all propaganda, but Jordan had discovered shale oil back in the eary 20th c.. Geography however wasn't friendly with a temperamental Jordan River? But, technology is here..., how tyme flies?
jmo
When all are sucked into this "Saudi Secret Deal" and oil goes south with shale oil dreams going north, the long term players shall use $ reserves (not all) for diversification into oil reserves (not necessarily in ME with logistics under US controls with some undermining by Russia).
Western foreign policy experts still in dreams that the past global game of oil control in ME and $ hegemony can still go on under their severe indebtedness. Russia and China matter today. They can play the long game to drain US/EC into a protracted tussle.
It is only when all are "sucked in" that you revert to pick the pennies.
Book: The Oil Card, Global Economic Warfare in the 21st Century; By James R. Norman.
"The book assembles a now well-documented chronology of how the US and its allies, including Saudi Arabia, pushed down oil prices dramatically in the 1980s, and kept them low for a decade. It was a concerted and stunningly successful effort to break the former Soviet Union by depriving it of desperately needed hard-currency income.
It then raises the question whether those same price-control levers have lately been pushed in the opposite direction to rein in another target: the oil-short Peoples Republic of China. Contrary to popular perceptions, media commentary and official explanations, the book methodically lays out the geopolitical logic and the market mechanisms behind the stunning 12-fold run-up of oil prices from 1998 to mid-2008. It also offers an explanation for the sudden price drop from almost $150/barrel to under $100 as Russia again flexed its muscle by invading Georgia."
As we can see they are not able to kill 2 bugs with one shot because enemies are both: exporters or importers of oil. Drop oil prices will pleasure China, India while Russia to be sad. Sooner or later roller coaster change rotation. As we see there is no universal solution which last forever
Russia is much more dependent on oil revenue than the Soviet Union ever was, and I believe the oil weapon only worked because the SU was rottting from within. Another story. This time, I expect Russia won't easily be broken, because China can't let that happen.
The leaders of China and Russia, in spite of the urgency of now, both think strategically.
China's critically important long term energy need is for a steady, reliable supply of oil and gas at stable prices that can't be choked off by price manipulations - or by the US Navy.
China's most critically important military security need is for friendly cooperative governments first of all in Russia/Siberia and then in Central Asia.
China's most critical financial need is an alternative to surrender to the Empire of the Dollar as their financial structure collapses - an alternative to submitting to the IMF and surrendering their sovereignty.
The Russian/Chinese alliance is as much a necessity for China as it is for Russia. Admittedly, nothing is certain, and the US has cards it ain't showin'. The US has thrown down with the Oil Weapon, and in a chaotic and dangerous world anything can happen. For one thing, China and Russia - like everywhere else (including the US) - have populations that have concluded they need a real revolution and so they are vulnerable to NGO-led "color revolutions". But to me it looks highly likely that the alliance will hold, and China will willingly bear the cost of preserving its relationship with its energy-rich hinterland.
In the meantime, other oil producers around the world will be thrown into crisis.
If I were a Chinese decisionmaker I would be advocating for ignoring the short-term opportunity to buy oil cheap, and for locking energy producers around the world into major (dollar-free) long-term energy deals at prices that will keep them afloat. Starting with Venezuela and Iran but embracing any country that will grab itself by the balls and deal. That should set off an interesting struggle!
As for Syria, Russia's lack of response troubles me, but Russian access is through Turkey, which is a main player here, and US preparations for a NATO war on Russia have moved forward in a year. I wouldn't write Syria off so easily though. They're a tough nut to crack - and Turkey is already starting to choke on it.
Nor would I overrate the part Russia played in stopping the attack on Syria last year. The lies about Sarin being exposed, Congress and Parliament balking and members of the armed services protesting had a lot to do with that.
You could see this coming light years ago.
"you could see this coming light years ago"
Light years ago?
I was on the poop deck waggling my sextant and I remember seeing Cygnus Lacus go flying by.
This site has become so goddamn pro-Russian it's hilarious.
All of you i'm guessing are pro-Russian and hate the West.
It's funny because you're all hypocrites. Screaming "Fascists in Ukraine, Neo-Nazi's in Ukraine! Fascist Junta! I am pro-Jew!" When in reality, you all despise Jews because of the Holodomor Conspiracy and because of the Jewish World Conspiracy. You idiots claim that Holodomor was "planned out by Jewish Bolsheviks, and that Stalin was actually a Jew."
You idiots and your stupid ass conspiracy theories.
I'm guessing that this is why all of you hate Jews, because you idiots believe that Stalin was actually a goddamn Jew and that the Jewish Bolsheviks killed off a bunch of your Russian Christians. This is absolute BULL LOL. Stalin exiled and MURDERED all of his Jewish rivals and nemeses, Trotsky, Zinoviev, Kamenev, etc, etc. He also practically killed almost every Jew in the Bolshevik Party. Russia also stands with those anti-semitic Shia states, Iraq, Iran, and Syria. These three states want to wipe goddamn Israel off the fuckin' planet. It all makes sense to me, why this idiotic Holodomor Conspiracy would start surfacing due to the fact that Russia needs to get it's sheeple (people) to support it's actions in the goddamn Middle East. SUPPORT SHIA STATES: IRAQ, IRAN, SYRIA RUSSIANS! HATE THE JEWS! They are ruining us from collecting our oil!!!
A couple of corrections for you.
1) It is holodomor r. But it is pronounced Golodomor. 'Golod' means 'hunger'. Golodomor is when Stalin sent troops to take all the food from Ukraine leading to the death of HALF the population by starvation- AT LEAST 20-30 Million deaths. It is not a conspiracy. It is a well recorded fact, with many contemporary accounts and photos. Basically, Stalin created a command economy, and then 'collective' farming - where every citizen had 'farm duty'. This took farming out of the hands of the people who knew how to do it and created a famine in Russia. Ukraine was most a farming country at the time, so was more successful in production despite all the changes.
2) Stalin was born in Georgia. His last name was Dzugashvili (Jugashvili). People think that the 'Dzu' in 'Dzugashvili' means 'Jew'. And the 'gashvili' means "Son of" - so that Stalin's given name meant 'Son of a Jew'. However, the Georgian word for Steel is 'Dzuga', meaning his given name in Georgian was 'Steelson'. 'Stalin' in Russian means 'The Steel One'. It seems to me that Stalin's link to 'Steel' is stronger than his link to jewishness.
Don't they drop the price of gas prior every election season too fool the muppets into voting for the incompetent incumbants?
Earlier someone astutely said this:
The corollary that that wise observation is this:When your economy and the economies of your trading partners are moribund and exhibiting rigor mortis and you have to drastically lower the price of the one resource sine qua non of a rescue and recovery, you don't tell the world you lowered the price of oil because the global economy is flatlining. . . . . . . . . . . . . . . YOU SAY OIL'S PRICE IS DECLINING BECAUSE YOU ARE PUTTING PUTIN IN HIS PLACE.
RIDICULOUS.
Shale Oil is unprofitable and will have to shut down capacity at around $85/bl.
A low oil price will hurt the US economy more than Russia's because it will force all the shale oil, and fracking to shut down..
Saudi oil production is almost exactly the SAME as the US's oil production, which is just a small amount ahead of Russia's oil production. The US deficit has been shrinking ONLY because of increased oil production leading to LESS NEED TO IMPORT.
FURTHERMORE, the Saudi's don't have enough pump capacity to lower the price much on their own. When Saudi's have lowered the oil price they have always, always, always done so in partnership with the other OPEC members.
Saudi oil production is almost exactly the SAME as the US's oil production, which is just a small amount ahead of Russia's oil production. They have to have help to lower it.
ALSO, the chart of production does not correlate with the chart of the oil price drop.
Look, Oil drops two ways: Either there is more pumping and increased supply, or the economy crashes and there is less demand. The oil production charts don't show enough oil production to do this - CERTAINLY NO GREATLY INCREASED SAUDI PRODUCTION.
Think about it. Saudi Arabia has 16% of world oil reserves. That means that the rest of the world has the remaining 84%.
For Saudi's to unilaterally lower the oil price by some 35% (Oil prices have dropped from $133/bl to $88/bl) in the last 3 months, all things being equal, they would have to increase TOTAL WORLD production by 50%...all by their little lonesome...
To unilaterally lower the oil price that much Saudi would have raise their production from 16% of world output to 66%.. There ain't enough oil in Saudi to add half as much as the whole world pumps to their production.
So, the three biggest producers of liquid fuels - OIL - in the world are, in order of production 1) Saudi Arabia, 2) United States, 3) Russia.
If there were a conspiracy to lower the oil price I should see it in their production quantities, or in their currencies. A 'lower' oil price is a relative thing = lower as compared to what?
The oil production charts show little reason for the price drop. There is less total production than there was in 2006.
Currencies tell you a different story.
The Dollar is appreciating. The dollar is appreciating because Europe is going into recession, and because QE is being 'tapered' (at least in theory).
That means, all things being equal, that one dollar will buy more oil than it would three months ago. Here's the chart.
http://stockcharts.com/freecharts/gallery.html?$USD
Now look at the oil price - BRENT crude (euro oil... US oil is mostly called 'West Texas Intermediate Crude - a.k.a. WTIC).
http://stockcharts.com/h-sc/ui
And here is WTI for comparison:
http://stockcharts.com/freecharts/gallery.html?$WTIC
What can I conclude? The Dollar appreciation cannot wholly explain the oil price drop. Why not? Because both WTIC and BRENT are priced in Dollars. If the Dollar alone were the factor, then they would both be affected the same, and they're not. Not even close.
So what else could it be?
Well, here's the Russian Ruble value for the last three months.
http://stocks.moneyshow.com/intershow.moneyshow/quote/chart?Symbol=149%3...
Now if you care to look, these two factors ENTIRELY explain the drop in the oil price.
The Dollar's value - the number 2 producer of oil in the world and the currency in which oil is priced for most of the world - is going up at the moment.
At the same time, the Ruble is crashing.
The Dollar is not rising due to oil issues, but because the publicly admitted QE is less, and all the national currency alternatives look worse than they did a few months ago.
The Ruble is not crashing due to oil issues. It is crashing because the Russian government is hostile to private foreign ownership, causing people to sell whatever they own in Russia, and in Rubles, and buy something else - apparently Dollars.
Russians also (wisely) don't trust their own currency so much. They AS A RULE keep foreign currency under the matress (literally). This saved a lot of families 16 years ago when the Ruble most recently defaulted. Which brings up another point. The Ruble has defaulted at least once every 40 years for centuries. Truly. Go look it up for yourselfs. Russians are right not to trust it.
And there you have it.
Oil is going down in Dollar price because:
1) The number 3 liquid oil producer's currency is crashing.
2) Europe is going into recession, while QE is 'tapering' both of which lead to a more-valuable dollar for pricing oil.
Amazing, isn't it? One month before the election and gas prices are dropping like a rock. What a coincidence.
Well, what did you think the taper is for?
The Fed has confirmed again and again that they believe in 'active' monetary policy (a.k.a. 'moneyprinting' a.k.a. 'QE').
Surely you didn't think that they slowed the Dollar devaluation to spare the little guy?
To Curb Global Poverty Every https://en.mwikipedia.org/wiki/Third_World Currency Should Be Pegged To OPEC Oil For 4 Years Till https://en.m.wikipedia.org/wiki/Triffin_dilemma Is Resolved.