The big loser is Iran. That is who the Saudis are waging economic war against, and they don't care one bit about Russia.
Posted on 02/03/2015 7:54:17 PM PST by tcrlaf
While the markets are still debating whether the price of oil is more impacted by the excess pumping of crude here, or the lack of demand there, or if it is all just a mechanical squeeze by momentum-chasing HFT algos who also know to buy in the milliseconds before 2:30pm, we bring readers' attention back to what several months ago was debunked as a deep conspiracy theory.
Back then we wrote about a certain visit by John Kerry to Saudi Arabia, on September 11 of all days, to negotiate a secret deal with the now late King Abdullah so as to get a "green light" in order "to launch its airstrikes against ISIS, or rather, parts of Iraq and Syria. And, not surprising, it is once again Assad whose fate was the bargaining chip to get the Saudis on the US' side, because in order to launch the incursion into Syrian sovereign territory, it "took months of behind-the-scenes work by the U.S. and Arab leaders, who agreed on the need to cooperate against Islamic State, but not how or when. 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."
(Excerpt) Read more at zerohedge.com ...
As I have stated since early last year, Oil prices (and IMHO, the Ukraine Civil War), are part of a much bigger geo-political power game being played for control of energy sales to Europe.
Triggering a Civil War in Ukraine, on Russia's border in retaliation for stopping Obama's attack on Syria two years ago didn't work, so the Saudi's resort to The Nuclear Option of crashing oil prices, which just happens to have the side effect of the Obamunists' long-desired wish to destroy U.S. Fracking.
Well, remember it was only a year ago that Obama wanted to bomb on BEHALF of the ISIS rebels in Syria.
Were it not for their embarrassing habit of filming their beheadings, Obama would be happy to take credit for ISIS. As well he should. Aside from the whole head-chopping thing, they are doing what they were intended to do, make war on Assad and drive a physical wedge between Iran and Syria.
Supposedly Reagan conspired with the Saudis to crash the oil price in the early/mid 80s to cripple the Soviet Union’s economy in conjunction with announcing “Star Wars” so they hadn’t a hope of keeping up. Of course it cost a huge job loss in the US but arguably it was worth it as it was the beginning of the end for the Soviets.
“Supposedly Reagan conspired with the Saudis to crash the oil price in the early/mid 80s to cripple the Soviet Union’s economy in conjunction with announcing “Star Wars” so they hadn’t a hope of keeping up. Of course it cost a huge job loss in the US but arguably it was worth it as it was the beginning of the end for the Soviets.”
Likely so with Reagan, although I would argue that the net effect was a huge job gain. Being in Texas, I know that we got clobbered by the price crash, but the national economy went through the roof with the low oil prices.
My guess is that the same will happen - we now have hundreds of billions of dollars that we don’t have to send to the Shakes and other clowns...money that stays home - it can only help us, as long as we’re a net importer.
Nothing like oil prices will remove Russia from Syria. Syria is Russia’s warm water port on the Mediterranean plus additional interests there. What oil price manipulation is doing is destroying America’s developing energy Independence. . Kerpash? .
What would be an acceptable source for you?
Ukrinform?
Ukrnapalm?
Censor.Net?
Reasonable, but Occam’s Razor says it’s because they have no better option.
Why should the Saudi’s cut production? It won’t raise the price.
When this last happened at the height of the cold war in 1985, it followed a visit by then Vice President George H. W. Bush to Saudi Arabia. Bush convinced the Saudi royal family it was in their best interest to reduce the price of crude oil to regain market share. As a beneficial side effect, Russia lost a major source of foreign exchange. This followed a major investment by Russia in radar capability, which was largely negated by the publicity of the US then recently developed stealth technology. With reduced foreign exchange, Russia was unable to replicate the stealth technology and the Soviet Union failed. Unfortunately, the economies of the oil producing states, Texas among the most extreme example, were crippled.
This time around, Obama visited Saudi Arabia twice during 2014, Bidden called the Saudi royal family once and the UAE twice. This time it appears the primary objective is to cripple the oil producing states economies, principally Texas, which have been a thorn in Obama’s side. The beneficial side effects of reducing Russia’s foreign exchange, increasing Saudi market share, and reducing the foreign exchange of Iran, along with the positive effect on the economies of states more aligned with Obama, are perhaps just that, side effects.
By the way, crude prices dropped from a intra day high of about $32 in 1985 to a intra day low of $8 in 1986. That is a 75% drop. Prices did not return to $32 on a sustained basis until 2003. Based on that history, we may see oil prices as low as $25 and they may last for several years.
The good news, Texas recovered last time, and will this time as well.
Europe demand is gonna drop like a rock when the Islamic civil war begins. So that is a stupid strategy and exactly what you would expect from the US. Russia is looking to China and India for the long term. That is where the future lies. Where ever there are Muslims, there will be war and limits on demand. The crescent was broken hundreds of years ago.
Reference Bump ...
Why is it a “conspiracy theory?”
Its been the most talked-about and plausible story out there since the price drop began.
The country that is flooding the market with oil is Russia. They produce more barrels of oil than any country.
Correct. And, if you count gas and it’s associated products, the USA has roared to #1. Now that there is an oversupply, further growth in production will be limited, and Saudi isn’t even interested in trying to get back to #1: They are more interested in developing their own petrochemicals industry for the long haul.
This idea that the Saudis are undercutting oil prices is hooey. Saudi Arabia can only affect prices indirectly, and if they try to do so in today’s market, they shoot themselves. Their lever is now smaller than the levers of others.
Add to that the fact that many of the biggest oil producers are now highly dependent on oil sales, and their economies are in the tank. Iran, Russia, Venezuela... They cannot pump less in a now more competitive market with lower prices, and more capacity in the wings, or their economies would REALLY be in bad shape. They have little to fall back on.
Incidentally, that last puts an interesting twist in Putin’s move on Ukraine. At least on the economic side, everyone believes the conflict is all based on oil & gas. But, there is, or at least was until the current war, a lot of Soviet style industry in Eastern Ukraine. I suspect Putin was after that too. Maybe someone advised him to “diversify”.
Interesting 6 pgs of comments/links at ZH. Thanks for posting.
ObamaNaziJews want to control Syria
uh-huh
sure
The big loser is Iran. That is who the Saudis are waging economic war against, and they don't care one bit about Russia.
That’s crazy.
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