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Russia Can Survive An Oil Price War
Submitted by Colin Chilcoat via OilPrice.com,
After a frosty reception at the G20 summit in Australia this week, Russian President Vladimir Putin required some much needed rest, at least according to the official explanation given for his conspicuously early departure from the proceedings. All things considered it could have been a lot worse. Russia finds itself in familiar territory after a controversial half-year, highlighted by the bloody and still unresolved situation in Ukraine. Nonetheless, the prospect of further sanctions looms low and Russia’s stores of oil and gas remain high.
Shortsighted? Maybe, but Russia has proven before – the 2008 financial crisis for example– that it can ride its resource rents through a prolonged economic slump. Higher oil price volatility and sanctions separate the current downturn from that of 2008, but Russia’s economic fundamentals remain the same – bolstered by low government debt and a large amount of foreign reserves. Moreover, Western involvement in Russian oil and gas plays is more pronounced than ever.
Economic diversification has not come easy for Russia, arguably for a simple, but effective reason; oil and gas are a source of tremendous wealth for the country. However, the dire straits of the 2008 global crisis illustrated the importance of financial diversification. Since then, Russian state-owned oil and gas giants Rosneft and Gazprom have increasingly allowed Western majors like BP, Eni, Exxon, Shell, Statoil, and Total access to some of Russia’s underdeveloped, but prized projects. Western companies have an estimated $35 billion tied up in Russian oil with hundreds of billions more planned and service providers Halliburton and Schlumberger each derive approximately five percent of their global sales from the Russian market.
The Western majors remain committed to their extra-national ventures and these powerful relationships ultimately limit the sanctions’ scope. Still, with their cooperation put on hold, Russia has been forced to look elsewhere, and increasingly within. Rosneft is set to announce new Arctic partners by the end of the year, a role formerly dominated by Exxon. China appears a likely suitor as the two countries have already embarked on a promising oil partnership in Russia’s Far East in addition to the highly publicized long-term gas deals. Domestically, Rosneft and Gazprom have strengthened their alliance and Putin has approved the creation of a state-owned oil services company.
The learning curve will likely be steep, but early successes have bred high hopes and oil production is not projected to contract. Gazprom Neft just completed its third delivery from their Prirazlomnoye project, the world’s first stationary Arctic platform. Shipments from the promising field have now exceeded 1,400,000 barrels on the year. Onshore, homegrown technology and execution has already yielded huge results in East Siberia, which looks to overtake West Siberia as Russia’s primary producing region in the near future.
The picture is incomplete without a discussion of price, and oil’s sinking value – a combination of low demand and increasing supply, US shale included – spells trouble for a number of major players, Russia among them. The breakeven price, or the production cost per barrel, is the central figure here however, and in an international game of ‘how low can you go’, OPEC is in the driver’s seat.

Source: Chevron, 2014
Still, the lower prices – Brent crude has averaged $81 per barrel thus far in November – are in no party’s best interest and OPEC will do their best to keep prices high while defending their market share. The cartel’s upcoming meeting in Vienna on the 27th will go a long way in determining the future trajectory of oil prices. The global supply glut will be the focus, but theories surrounding both US and Saudi collusion and conflict give doubt to any plan for unified production cuts.
Business as usual in Vienna would be a welcome sight for Russia, who would see a decline in the United States’ ability to define geopolitical events in the Eastern Hemisphere. The truth is, the US can’t win any volume or price-based game of brinkmanship with the traditional producing states, Russia included. Shale plays in both Russia and the US will soon be priced out with continued slippage. Unlike the States however, a majority of Russia’s production comes from cheaper, though declining, fields in West Siberia. The International Energy Agency already predicts a 10 percent decline in US shale investment in 2015.
Whether or not that’s enough to stunt global supply remains to be seen. Shaky situations in Iraq and Libya could just as easily remedy pricing woes overnight. What doesn’t kill you doesn’t always make you stronger, but Russia can survive a price war.
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I work with guys who've done work in the Russian patch.
They can outprice anyone. One time they got a drill bit stuck. So they brought in a huge excavator and used it as a hammer. Smash smash smash. Unstuck. Trip out. Tool up, trip in and drill. Done. In the west, there is so much dog fucking and protocals invioved. What Russia did in a couple days, it would take a western company over a week.
Russians improvise many uses for excavator:
http://www.youtube.com/watch?v=GOrguILKTAM
Russians are creative and are born survivalists. While the Russia economy is definitely affected by the financial sanctions, the impact is much less dramatic than what occured in the early 1990's.
In 1-2 years, Oil will be back up in price and Russians will have learned an important lesson on the treachery and hypocrisy that rules the West. The Kiev putsch and subsequent hysterical lies spewing from the western MSM gives Putin the leverage he needs to reform the economy and purge the atlanticist traitors. Fifth columnists, like Navalny, are permanently discredited and pussy riot is a bad joke. The world economy cannot thrive without Russian Oil and Gas, so unless the USSA figures out a new way to steal her resources, life will go on for the average Ivan.
I think the two year window will coincide with the total default of the West.
"oil and gas are a source of tremendous wealth for the country."
Russia doesn't need to steal other countries' wealth.
Other countries need to steal Russia's wealth, hence the demonization and de-stabilization efforts by the self-declared "international community".
"Russia doesn't need to steal other countries' wealth."
Don´t romanticize. It stole while could for centuries, when expanding the pre Soviet empire. Now, when the Soviet era European satellites are gone, the country has to live on the older spoils and to try develop a more modern society from the one, which bears many hallmarks of Al Caponean era in US.
Al Capone's era was February 1925 to February 1929, a good era in the US.
How to recognize establishment's propaganda in one easy step: today, The Oil Price.
Whenever some "analyst" brags endlessly about how the low oil price will "bury the Russians", instead of worrying more about the already bankrupt US shale industry, it's a clear sign that the fix is in...
The siege of Leningrad would be a fine example.
Had that been a modern american city the siege would have lasted minutes (long enough to raise the German flag) rather than 2-1/2 years with over a million dead and 2 million casualties.
Mother of VVPutin endured seige, lost child there. Brother of President Putin.
Few know much about VVPutin in real, and western media is not planning to help with facts of truth.
https://www.youtube.com/watch?v=u3d_yxJhmjk
I think we can see a lot here. No American poltician would go where Putin goes here. He talks about his baptism and how his mom had to sneak him out of the house as an infant. He then said his father was a proud man and was not religious.
He is at Midnight Mass during Christmas and it is a 3 hour mass. He impresses me. American politicians sicken me.
Russian Soul
When the citizens of Leningrad ran out of food and rations were no longer sufficient or available, they ate the cats and dogs. When they were gone they ate the rats. When they were gone the ate the wallpaper which they knew was plastered on with a flour base. Looters were shot as were those who having gone mad with hunger resorted to cannibalism. For as long as they could they defiantly kept schools open. The morons in DC have no idea what they are up against.
Nor do their Zionist lackeys in Kiev.
I respect Russians and Putin. I no longer respect America and Americans. Americans lost their country.
Moreover, Russians have been and are quite comfortable living in a hyperinflationary/black market world since 1990.
As for 'mericans, not so much.
and way ahead on the home garden skills
Russians gift new meaning to oilfield terminology of "Tool Pusher"
Russia needs $110 oil to fund its deficit spending and avoid having to sell bonds at yields of 9-10%.
The US, on the other hand, can sell bonds all day in the low single digits and/or print.
The “weapon of oil” that brings chaos
Used by the Saudi Arabia and the US against Syria,Iran and Russia
http://failedevolution.blogspot.gr/2014/10/the-weapon-of-oil-that-brings...
Another laser sharp after-the-fact analysis.
vlad knows better than most that russians can get through anything, and will.
The Russians 'got through' 1991, but not before the country collapsed and was split up into 15 separate republics. For the next couple of decades - continuing through to this day - Russia's best and brightest flee the land of suffering for places like America and Europe. And those that can get a visa are still fleeing!
Each year a small handful of Lee Harvey Oswalds emigrate to Russia...but many thousands more leave Russia's shores for the US.
I wonder why?
"What is good for a Russian is death for a German"
Russian cinema "Brat" (Brother)
Alexander Nevsky's legacy.
Russia can survive economically a price war.
But can the Putinist system of rival Oligarchy groups of predatory appetite stick together to create a national system which is NOT economic rape?
Make no mistake, these guys are as hungry or hungrier than the Siberian tiger.
"But can the Putinist system of rival Oligarchy groups of predatory appetite, etc, etc..."
????
Russia can survive. But will Putin?
Depends if all that cancer talk is real. He didn´t look unhealthy to me during the last two summits.
Russia's population will continue to relentlessly dwindle until there's more to offer folks in Russia than elsewhere: more economic opportunity, better ecological and living conditions and all the other ways one ranks prosperity.
That's why Vlad is reduced to begging and bribing Russia's inhabitants with incentives to stick around and grow large families.
http://www.thejournal.ie/putin-russia-three-children-712802-Dec2012/
pay attention this is changing small bit by small bit.
The balancing act includes jail time for those who are not discreet in their plundering. Latest news about the new cosmodrome under construction is that 2 construction bosses are indicted for corruption and others are under investigation. Putin is also trying out a new anti-corruption program to force bureaucrats to live within their budgets under the tight sanctions. http://www.sptimes.ru/index.php?action_id=2&story_id=41262 and http://russia-insider.com/en/2014/11/19/05-20-57pm/putin_corruption
If Putin is successful, Western Russophobes may be dismayed again to see that their punishments ultimately improved conditions inside Russia. Time will tell, of course.
Is long and calculated process.
Much of old Soviet laws remain, with slow and cautious changes implemented.
Cannot change all overnight without opening troubles. Enough troubles from outside already.
Stolypin told "Give Russia twenty years without outside and inside interfences and you will not recognize her"
interferences remain, but Russia has made much progress.
http://www.heritage.org/research/commentary/2003/03/russias-flat-tax-miracle
Putin and Russia have made great progress over the past 10 years.
I hope the Russian people realize the dual citizen vermin who are running Kiev are the same people who were backing the Bolsheviks and are the same criminal scum who control America.
Pedro
oil=gold
gold=oil
NWO will break
before Bric tag team does
The oil price stuff aside [how oil is priced is fucking absurd anyway], you don't have to want to take long walks with Vlad to stand amazed at the Orwellization of the Ukraine/Crimea narrative in the corporate, largely neocon/zionist controlled MSM.
I mean - RT.com is giving you Russian spin. But the NYT and Wash Po and Fox and CNN - that's basically completely distorting the facts or simply leaving them out...
Where's the communications files from the ATC tower? Where's the black boxes? If Obama is so sure the Russian separatists shot down the plane - how about a shred of evidence [and don't give me grainy sat photos from a fucking private 3rd party - that's as absurd, and I know a little bit about this stuff - as all these beheading videos being discoverable only by sayan Rita Katz].
Putin probably has had to be about as harsh as he has been, and aligned himself with some of the oligarchs, merely to free Russia from, and disgorge the, let's rip this band aid off quickly - Jewish oligarchs who robbed Russia blind under Yeltsin, even as the US set up dozens of NGO fronts to try to destabilize Russia proper.
Most of the criticism of Vald on the net and in the media sounds like it came from the mouth of some pot bellied neocon theorist at a DC area graduate school. It's pure propaganda.
And no, I'm not saying the Russians aren't spinning as well - but it's mostly, here, corrective spin.
Paul Craig Roberts, Ray McGovern, and a few others are doing some decent reporting. Escobar and Raimando, as well.
www.consortiumnews.com and counterpunch and globalresearch - all sites I learned about here, have been great to complement what anderson cooper and wolf blitzer have been trying to get me to believe.
^^^ esp. excellent, imho
Well, I think I saw the Dutch govt. agree keep MH17 investigate secrets, and now getting their gold back..curious?
I am wonder...
A simple quid pro quo for covering up USSA complicity in the MH17 false flag.
it's obvious isn't it? the ukies knocked it down. if it had been RU it would be all over the news. doesn't take a mental giant to see this does it.
NL getting its gold back, probably 30t of it has UE central bank markings. LOL
DE still waiting for the 2nd tranch of 5 tons.
Hard to figure who the USSA hates more RU or DE. lol
"Who's Telling the 'Big Lie' on Ukraine? | Consortiumnews"
Thanks, an interesting read. Kind of puts Ukraine's troubles into perspective.
Robert Parry also:
http://consortiumnews.com/2014/09/02/whos-telling-the-big-lie-on-ukraine/
Volkodav - I have asked you this before about Yeltsin. Criminal buffoon who let the oligarchs take control or smart old boozer and patriot who picked a man that he knew would save Russia?
Or did Yeltsin pick Putin not knowing how great Putin would be?
I remember seeing video of Putin with Yeltsin and he was uncomfortbaly shy. He is not the same Putin today.
HaHa Many still try to figure that.
Remember he was old and bad health, and drinker...so judgement questionable. But sly in ways...
He was deceived many ways by outside promises of help, when plan was otherwise in real.
Remember the Oligarchs looted from powerful outside support and planning, not improvised
Yeltsin appeared weak, had even used tanks against people. Terrible decision.
Yet, was his a genius pick? Seems he knew....or was guided
Yeltsin when turned over power told VVPutin "Take care of Russia"
That is trust.
Previously VVPutin had told Yeltsin he did not think himself ready...
but applied himself to the responsibility placed upon him.
began reverse the takings and depradations.
take note that KGB had anticipated collapse for more than a decade previous and studied actions
Remember there was whole group with Putin, and moved fast for solutions.
My best aswer to your first question..I think Yeltsin was all those you described
If you study young Vladimir, one must compare the growth of purpose, what formed him..
bottom line? I cannot..
cannot explaine
Only Devine Intervention explains...
Ask God
Russian Orthodox Church Third and Final Rome
Thanks. I want to think Yeltsin made mistakes but in the end he was a patriot and helped save Russia by picking Putin.
I Wish Russia the best. America is like the end of the USSR. Run by criminals stealing everything. Run by the same dual citizen bolsheviks who murdered millions in Russia and will do it in America if they get the chance.
IMO Yeltsin did not have an idea about what Putin was capable of. Otherwise the oligarchs that were operating at that time would have never gone along with it/him.
Shit, the price of oil can be maintained by the Russians flying about in 30 year old bombers, while the US and NATO deploy the latest in aviation and naval technoloigy to watch what they are doing.
lol, shit is a good desc of what follows in your post. NATO can't even afford to take the Mistrals from FR. And don't forget the F35(apty named because it req. 35hr of gnd maint for every hour of airtime)and the dead in the water Aegius cruisers in the Black Sea. LMAO
Both of Lockheed's planes - the F-22 and the pregnant-bug looking F-35 are nightmares. The YF-23 was the stroke of genius never allowed to make it, because Lockheed had/has a 'Lock' on Congress. Galls me to this day... That plane was superior to the YF-22 in nearly every respect, save for ultimate 'cornering' capabilities.
And Americans flying around in their 62 year old bombers. And Americas latest and greatest is limited to CAVU only.
F-35 is junk and F-22 is only marginally better. Search Pierre Sprey F-35. He helped design the F-16 and A-10 plus worked on the F-15.
The Russians missiles are state of the art. They are among the best programmers in the world too.
America is Obama and rapin Bill Cosby and shit like the Bushes, Clintond and Nudelman. Trash. Face it - America is shit now. The Republicans are cowards and co-cospirators
Programmers...
TopCoder rankings:
http://community.topcoder.com/tc?module=AlgoRank
Russians with one Belarus have 20 of top 50 varies between 20 and 30 Rus at top
Petr Mitrichev #1
Chine has gained more places lately
The Russians also save by using EMP. http://www.nesaranetwork.com/2014/11/13/russian-su24-bomber-faces-off-ag...
Whenever there's a question in the title, I automatically assume that Katie Couric hacked ZH.
Russia and the US are natural allies, actually.
We could have quite the bilateral trade, coordination on genuine Islamic terrorism [ISIS seems to be a CIA and/or Mossad show with Turkish and Saudi support], vodka drinking contests, etc.
The trouble is the American Deep State - where neocons and so-called "realists" have become embedded, tick-like, in the trans-administration political power grid.
Banks, MIC, Big oil/gas, and Israel run the US government. The evidence is everywhere. It's a rea problem - a tiny pseudo-elite would prefer endless conflict, etc. etc. Elections plainly don't solve the problem.
Dick Cheney's legacy - he filled these trans-administration positions with neocons, esp in the last year of his administration. Now you can't get rid of them. Of course, he knew that when he did it.
But US shale-oil cannot.
Hence you can discount assertions that US producers are the source of the price war.
That leaves only one possible source, with vast geopolitical implications - IT'S THE GULF CARTELS.
America is Obama. No one has the guts to do anything. Thank liberals, Democrats and progressive who voted for the dictator. Fiiiking evil retards.
Russian oil producers may be able to survive an oil price war, but the Russian regime can't survive in its current form for more than a couple of years at these prices without serious problems. Heck, let's face it, even within that couple of years there's a fair chance of Russia - serial defaulter and currency devaluer that it is - having yet another currency crisis and concomitant devaluation.
Most US shale oil producers seem well positioned to weather the onslaught unless prices fall below $60 or so.
Title of this should read
"Russia Can Survive"Because Russia works with the West
http://newworldorderg20.wordpress.com/2014/11/21/u-s-chevron-enter-joint-project-with-russias-lukoil-in-nigeria/
http://newworldorderg20.wordpress.com/2014/11/20/russias-gazprom-already-part-owner-of-so-called-alternative-energy-sources-for-e-u-energy/
http://newworldorderg20.wordpress.com/2014/11/11/reprint-article-article-being-deleted-on-net-gazprom-buys-europes-biggest-underground-gas-storage-facility/
http://newworldorderg20.wordpress.com/2014/11/07/jpmorgans-deal-with-gazprom-cements-thier-relationship-of-course/
http://newworldorderg20.wordpress.com/2014/11/18/u-s-using-russian-rocket-engines-to-launch-spy-satelites/
and more......http://newworldorderg20.wordpress.com
Russia will destroy green energy
.
new cold war, 100% more bombers, ships tanks, infantry these people are not stupid... they want lower oil prices
.
the Russians are terraforming the whole world and the US military industrial complex is duped into forcing NATO to help raise property values creating cities in what is currently a wasteland of natural resources in Siberia
1. Russia's true costs of pumping oil is ~ $35. Everything above that is profit.
2. If Russia were to index their currency (RUB) to Gold + Energy (Oil/Gas), then several good things would happen, including:
a. The price relationship between Energy (Oil) and Gold has been fairly constant, even though the relationship is expressed in fiat currency (dollars).
b. TPTB in the West (Club Fed, i.e. "G7 & Vassal States") can manipulate currencies on the FX. They can also manipulate PM, but... they'd find it UNSUSTAINABLE to manipulate Gold AND Oil at the same time and do it for years, if their Tier-1 Competitors/Enemies (BRIICS) index their fiat currency to Gold+Oil. If they tried this, the market would lose confidence in the pure-fiat currencies and hedge (mitigate risk) by divesting some part of their pure-fiat and investing in Asset-indexed fiat (RUB, CNY...).
Beware... as I've said several times recently: It's a foot-race to the Finish Line (Monetary Tectonic Shift or Monetary Reset) for the two super-giants -- Club Fed vs. Club BRIICS. Club Fed can -- and I am the first to have predicted this -- WILL front-run Russia and China, by hitting the Reset Button first: At the last possible moment, Club Fed will "harmonize" their monetary systems by switching from the USD to the SDR.
Given that the SDR is composed of the USD+EUR+JPY+BGP, they will have lost nothing but gained everything: Given their combined markets, their economies and GDPs, they can (as a single unit) force everyone else to use SDRs or be left out in the cold. They likely will force the Arab Gulf States to switch to the SDR also, and China would have to buy SDRs. In time, the SDR will be the one currency to Dominate and then "Rule them All".
If Russia (as the fastest, most confident and biggest BRIICS player) were to move first, and back/index the RUB to Gold+Energy, then they and the rest of the BRIICS would have momentum on their side if Club Fed reacted with the SDR move.
Possibly, but how long will the other 6 billion people in the world allow the USD+EUR+JPY+BGP crime syndicate to print their way to wealth and prosperity while they provide all the labor and materials and live in poverty? You left out one factor: "Given their combined markets, their economies and GDPs, ...." -- what about their combined debts? Will the world just let them skate on that because they changed currencies? It has never happened before, this time is no different.
Title should be " RICH RUSSIANs CAN SURVIVE OIL WAR " and the Poor will be lined up to fight a FAKE WAR and give up their lives !
The Poor will alway pay the price so some rich fuckers can keep their money ... Russia wake up !
Until it can't.
Is it important to you?
Russians have survived after Hundreds of Years, Invasions and Bolshevik/Soviet crimes.
better worry about your own country
Pulled up to the gas pump yesterday and paid $3.00 per gallon. Couldn't believe how low the price has fallen. It's amazing to me TPTB will drive the worldwide price of oil and gas down to try fuck Russia and destroy the Ruble, but would never do the same to help the consumer. In fact the opposite is true. They will drive the price of oil and gas up as high as they can in a heart beat to fuck the consumer. What kind of crazy fucking world is this?
As long as Russian Central Bank is a branch of IMF, I see this "currencies war" as a good cop/bad cop routine. The world elites have f*cked up so bad the world economy and are trying to rectify their own faults while maintaining their status. If you hear that the Russian Federation is changing their constitution abolishing private central bank, then you 'll know it's the real deal...
RT today signaled Putin is preparing to cut production deeply if need be. Putin figures that the war has been declared by the west, so it now makes no sense to pretend anymore. RT said that Russia was preapring plans for oil production cuts in the face of lower prices, and was seeking other producers cooperation as far as possible, but emphasized that Russia will go it alone if need be.
People tend to think an economic crisis will force Russia to surrender and ask for American experts to run their banking and corporate assets, while Putin retires and pro west liberals sell Russia to the highest western bidder, via corruption and kick backs. A whole calss of Western trained Russian Liberals are already working for western NGOs and are waiting in the wings for Putin to leave. Then they will assume power and hand over the nation to the west, mainly American management and ownership. About what is being planned for Ukraine.
Trouble is, the Russian liberals who work for the United States are very short on public support. And NGOs are losing power now that they have been forced to reveal their funding, which has proved to be mainly from the US Government and US corporations.
So, don't pin too much hope on the small liberal groups in Moscow who work hand in glove with the US State Department to sell out all of Russia to US control. This will not happen. Victoria "fuck the EU" Nuland would get her face smashed in by the man on the street if she tried her NGO cookie tricks in Moscow.
Puss Riot in Sochi found out...
That was a setup photo op to show how brutal the 'Cossacks' can be. When that bitch was smacked with that knut I recall how surprised she looked, like it really hurt. Some time later someone posted pictures of PR and the 'Cossack' hanging around together before the staged performance. It was just another phoney PR pr stunt.
I agree with JB, there's not a lot of love in Russia for the US NGO's, I'm surprised that Putin hasn't moved harder to expose the vermin bringing 'democracy' to Russia.
Link?
I never looked the video, was told about.
It's beena while and I didn't save the link, here's what I dug up:
Pussy Riot's Whipping By Cossack Militia Appears To Have Been Stagedhttp://www.blacklistednews.com/Pussy_Riot%27s_Whipping_By_Cossack_Militi...
video pulled
sorry, that's all I could find now.
Wasn't fake. Here is long video...
Long video with toward end couple Sochi guys trying to get them repeat the infamous frozen chicken
in vagina stunt that one did in grocery store with kids present...
http://www.youtube.com/watch?v=FFrZfluKDrc.
Several minutes there, it is real with Cossack, Police and angry public.
Friends said they annoyed Adler/Sochi for days.
before the Cathedral stunt, they had done all kinds of deviant, plenty for arrest, and offending public
but let get by...the Cathedral they went too far
Well documented now they are paid for this ugliness
They are trying same theme with Hong Kong as they are in Uktraine, next will be Hungary!
http://t.co/X5sJ3NUswC This is what America and the west are inflicting on the people of Ukraine??
If you lower the price till you cant profit ya you cut production, not really a cunning plan just no choice.
Our friends over at Soberlook.com had a very interesting log entry about which oil producing countries were best placed to absorb falling oil prices.
It would appear that Saudi Arabia has twice the level of wealth reserves of Russia to absorb lower long term oil prices.
http://soberlook.com/2014/10/the-saudis-have-staying-power-to.html
Does anyone think the Russians are smart enough to hedge? Just wondering. They beat the US into space but are helpless dolts in an economic cold war? Not likely.