Free Republic

Eight years ago, Senator John McCain declared that Russia, under Vladimir Putin's administration, could only afford to be a major player in world affairs as long as energy prices remained high. In 2016, his thesis will be tested. With oil prices dipping below the $30 per barrel mark, and with Russian companies like Lukoil warning that prices might hover in the low $20s range—on top of sanctions that the United States, Japan and the European Union continue to maintain (through midyear at minimum)—has the Kremlin's luck simply run out? And what of the dream of recasting Russia in the twenty-first...

Beleaguered currency has lost more than half its value in last 18 months A dazzling display of festival lights makes Moscow look magical, brightening up the dark winter night. But the image of a bright, confident 2016 is a mirage. "To tell you the truth, we are really worried for our country," says Anya Zhurova, passing by and lured in by the light show. "We feel sick for our country and we hope our president [Vladimir Putin] can sort out all the plans he's made, but it's a difficult period." Like a heavyweight boxer, the battered Russian ruble will try...

Stuck in a recession and with no sign of a reprieve in the oil price, Russia could quickly descend into chaos if the money runs out, William Browder, a well-known critic of the Kremlin and chief executive of Hermitage Capital, told CNBC. "I don't think you can underestimate how bad the situation in Russia is right now, you've got oil below any measure where the budget can survive and you've got sanctions from the West. Russia is in what I'd call a real serious economic crisis," he said on Thursday. Speaking to CNBC in Davos where global business and political...

Picture the scene. It is 2016, oil costs on average $35 per barrel, and Russia’s recession rolls into its second year. The economy shrinks by 2-3 percent. Unemployment creeps up, and wages continue to fall, depressing consumer spending. The ruble devalues, driving up inflation. To keep price rises in check, interest rates remain high, discouraging investment. The government drains its reserves, hoping that the oil price picks up before they run dry. This was the nightmare scenario painted by Russia’s Central Bank in its December research paper. The bank, and Russia’s federal budget, is still planning for average oil prices...

Can Russia Survive Through 2020? 05 August 2011 By Sergei Petrov Strategy 2020 — the question of where Russia will be in 2020 — hangs in the air. There are a variety of scenarios being offered by leading economists, political scientists and other analysts, but one thing is clear: There will be no miracles in the next nine years. The prospects for a country mired in archaic institutions, an oil- and gas-dependent economy, systemic corruption, unprotected property rights, corrupt courts, fraudulent elections and an apathetic population can only be dim at best. I’m almost certain that Russia will not be...

The boom years left the US oil industry deep in debt. The 60 leading US independent oil and gas companies have total net debt of $206bn, from about $100bn at the end of 2006. As of September, about a dozen had debts that were more than 20 times their earnings before interest, tax, depreciation and amortisation. Worries about the health of these companies have been rising. A Bank of America Merrill Lynch index of high-yield energy bonds, which includes many indebted oil companies, has an average yield of more than 19%. Almost a third of the 155 US oil and...

Last year, 42 North American drillers filed for bankruptcy, according to law firm Haynes and Boone. It's only likely to get worse this year. Experts say there are a lot of parallels between today's crisis and the last oil crash in 1986. Back then, 27% of exploration and production companies went bust. Defaults are skyrocketing again. In December, exploration and production company defaults topped 11%, up from just 0.5% the previous year, according to Fitch Ratings. That's a 2,000%-plus jump. It's just the beginning, says John La Forge, head of real assets strategy at Wells Fargo. If history repeats, people...

Russia appears to be making preparations to establish a new airbase in Syria, this time along the border with NATO-member Turkey, a senior U.S. official tells Fox News. The move is bound to anger the Turkish government months after the downing of a Russian jet by the Turks. A handful of Russian military personnel, including engineers, has been seen in the vicinity of a largely abandoned airfield in Qamishli, a city in northeast Syria along the border with Turkey. The area is largely controlled by Syrian Kurds, with pockets of regime-controlled territory including the airport.Russia and Syria’s Kurds have a...

A stunning new Foreign Intelligence Service (SVR) report circulating in the Kremlin today states that one of the United States Navy’s top commanders was relieved of his command a few hours ago after he sent out an “email/posting” revealing that President Barack Obama was in the process of purchasing a multi-million dollar seaside luxury villa in the United Arab Emirates city (UAE) of Dubai. According to this report, the Commander of the US Navy’s Carrier Strike Group 15, Rear Admiral Rick Williams, posted a “pointed” query on 8 January [since deleted] to the US Naval Institute’s “Readiness Kill Chain” “recipients/responders”...

Saudi Arabia is mulling the sale of shares in Aramco, believed to be the world's most valuable company, as part of plans to repair its finances and open up its economy. The announcement was made by the country's deputy crown prince as Saudi's secretive, state-owned oil firm grapples with the effects of oil prices nearing 12-year lows . Mohammed bin Salman told The Economist: "That is something that is being reviewed, and we believe a decision will be made over the next few months." The Saudi economy has taken a battering from the oil price decline and the finance ministry...

If you read Stephen Moore's column, he noted how the consensus over oil is wrong. We're not running out of oil. In fact, many have been saying we're going to run out since the 1930s: These stupid predictions of the end of oil have been going on for most of the last century. Just over 100 years ago, the U.S. Bureau of Mines estimated total future production at 6 billion barrels, yet we've produced more than 20times that amount. In 1939 the Department of the Interior predicted U.S. oil supplies would last 13 years. I could go on. The folks...

Russia’s oil-dependent economy appears headed for a second year of recession, and Energy Minister Alexander Novak says the blame falls squarely on the Saudis. The Russian gross domestic product fell by 4 percent in November from its level in the same month in 2014, and had shrunk 3.7 percent in October from its levels a year earlier, the Economy Ministry reported Monday. The reason, to no one’s surprise, is the plunge in oil prices over the past 18 months. The global average value of a barrel of oil has crashed from over $110 per barrel in the summer of 2014...

The economic war being conducted by Russia against Turkey provides some opportunities for the United States if it chooses to take advantage of them. However, according to Al-Monitor, a website that covers all aspects of what is going on in the Middle East, Israel is already poised to make a diplomatic and trade breakthrough with Turkey. Israel has uncovered a great deal of proven natural gas reserves in its offshore Tamar and Leviathan fields. The Jewish state has enough gas to supply its own needs and have plenty left over for export, an astonishing turn of events, as Israel has...

Barack Obama is preparing for his final State of the Union Address, which he'll deliver January 12. And the president is not looking to slow down as the end of his presidency nears. "I've got 12 months left to squeeze every ounce of change I can while I'm still in office. And that's what I intend to do," Obama writes in an email to supporters. We've done a lot of remarkable things together this year, and it's because of committed citizens like you that this country keeps moving forward. You keep proving the cynics wrong. On January 12, I'll be...

Guest essay by Eric WorrallHuffington Post has a plan to address the as yet unanswered question of who will foot the bill, for the renewable transformation green advocates want, in the wake of the Paris COP21 agreement. HuffPost’s suggestion is a $2.9 trillion rise in annual taxes on fossil fuels. How Can We Pay for the New Energy Economy?Many a great idea has been deflated by a simple question: “That’s nice, but who’s going to pay for it?” That question hovered like a cloud over the international climate conference in Paris a week ago. Simply put, the goal of the...

The country's top finance official, Anton Siluanov, said the government must be prepared for prices to fall further in 2016 as the global glut grows and new supply -- for example from Iran -- enters the market. "Everything indicates that low oil prices are likely to dominate next year. And it is possible that at some periods [the oil price] will be $30 per barrel," Siluanov was quoted as saying by Russian state-run news agencies. That would spell more pain for Russia. Oil and gas exports make up almost half of government revenue. Oil futures were trading at their lowest...

The draft of the international agreement to deal with climate change, which is being considered today in Paris by representatives from 195 countries, calls for the developed nations of the world to transfer wealth to developing nations, including through "public funds." "Developed country Parties shall provide financial resources to assist developing country Parties with respect to both mitigation and adaptation in continuation of their existing obligations under the Convention," says Article 9 of the draft agreement. "As part of a global effort, developed country Parties should continue to take the lead in mobilizing climate finance from a wide variety of...

Saudi Arabia might just bust OPEC by keeping its taps open, but right now the Kingdom's main concern is strangling American shale production. Read: Markets had been expecting Opec to announce a new ceiling on production after last Friday's meeting, but analysts at Barclays said the lack of any curbs in its announcement was a sign of discord. "Past communiques have at least included statements to adhere, strictly adhere, or maintain output in line with the production target. This one glaringly did not. " they said. Saudi Arabia needs oil prices of $100 a barrel to balance its budget, but...

OPEC was slow to understand the rising threat posed by the US shale industry. It may now have misjudged its resilience. Frackers have been quick to cut costs with multiple pad-drilling, and they can revive production relatively quickly as soon as prices recover. Goldman Sachs said the deeper the fall in oil prices over coming months, the sharper the rebound later, comparing it to the cycles after 1986, 1988, and 1998. OPEC needs a higher price to fund the social welfare nets and defence spending of its members. The great question is whether US shale will snap back within months...

On November 30, as the Paris international climate conference was getting underway, the U.S. Environmental Protection Agency (EPA) announced a long-overdue update of Renewable Fuel Standard (RFS) requirements. Originally established in 2005 and then greatly expanded by the Energy Independence and Security Act (EISA) of 2007, the RFS mandates increasing use of ethanol, biodiesel and other biofuels in America's cars and trucks. Two things were notable. For the first time, EPA set the overall mandate at levels significantly lower than targets Congress called for in 2007. Second, raising the hackles of the biofuel lobby, the Obama administration omitted the RFS...